'We'll be left with no céad míle fáilte': Restaurateurs call for assistance to stop industry closures

CORK restaurateurs have called for “meaningful change” from the Government in the wake of the recent string of business closures in the city.

Concerns have been raised about the expense of running a business during the current cost-of-living crisis after four popular Cork restaurants announced their closures: White Rabbit Bar & BBQ on MacCurtain Street, Nash 19 on Princes Street, Tung Sing on Patrick Street, and Pigalle on Barrack Street.

Finance Minister Michael McGrath confirmed yesterday that the Government will introduce flexibilities to the tax debt warehousing scheme, which allowed businesses to ‘warehouse’ certain tax debts during the covid-19 pandemic.

An extension of the scheme in October 2022 gave businesses until May 2024 to make arrangements to repay their warehoused debt or reach a phased payment agreement with the Revenue Commissioners.

Speaking to RTÉ News in Davos, Mr McGrath said: “We are going to make some changes to the tax warehousing regime with a view to being as flexible as we possibly can.

“We’ve been engaging with the Revenue Commissioners and a proposal is currently being developed, which we hope to finalise very shortly, to introduce further flexibility.”

Speaking to The Echo, owner of 3 Little Piggies cafe on Union Quay, Paul Walsh, said: “I believe Michael McGrath and the Government made the announcement today [Wednesday] because they now realise the return of 13.5% Vat on the hospitality sector and unprecedented increase of €1.40 minimum wage overnight has created the perfect storm in the sector.

“Both should have been implemented over a two- to three-year period. Many were just balancing their books during and after covid, and now energy and the cost-of-living crisis and the Government policies of late are sending many of these businesses into the red.”

Owner of Koto on Carey’s Lane, Jeff Safar Hamidi, raised concerns about the rising costs of running a business and said it is “heartbreaking” to see so many closures in Cork in recent weeks.

“This is a time for firm and meaningful change from our Government,” he said. “The Vat rate at 13.5% is completely wrong and out of touch. Fix it once and for all, set the rate at 9%. Separate hotel rooms from restaurants and cafes. Show us you care about your local small business.

“I’ve never seen so many closures in such a short space of time, most of which are small, independent businesses. It’s heartbreaking. If the Government doesn’t act now, we will have a country devoid of personality and we’ll be left with corporate chains and no céad míle fáilte that our hospitality venues are so well known for.”

Speaking to The Echo, Cork Business Association (CBA) president Kevin Herlihy said: 

“Cork Business Association welcomes the minister’s comments but we await further details, which we expect to see over the next week or two. We do feel that more needs to be done as part of an overall package.”

CBA has also called for a meeting with Mr McGrath to address pressing issues.

To further alleviate pressure on businesses, CBA has proposed that the Government engage in urgent discussions with energy providers about the escalating costs, particularly in the commercial sector, advocating for a reduction to positively impact overall business expenses. In the hospitality sector, CBA has also called for a review of the Vat rate for food to provide essential support to businesses facing challenges.