One in three restaurants will have closed within six months if the Government does not take urgent action, the Restaurants Association of Ireland warned today.
It said that more than 80 per cent of restaurants were currently losing money and several hundred had already closed since the downturn began.
The association pointed out that Irish restaurateurs paid the highest catering wage rate in Europe, the highest excise duty on wines in Europe and their food cost inputs were 24 per cent above the European average.
The association has provided a ten-point plan to rescue the sector, in its pre-budget submission to the Minister for Finance.
Proposals include reducing the national minimum wage from €8.65 to €7.65 per hour and abolishing the minimum catering rates, which are eight per cent higher than the national minimum wage. It also wants the scheme which pays workers more for working on Sundays abolished.
The plan calls for a reduction in local authority charges, including a decrease in commercial rates to business by 10 per cent in 2010.
It says the Government should remove the air travel tax and introduce free public transport to all over 65s who visit Ireland.
Other suggestions include the introduction of a food tourism strategy, changes in VAT rates, incentives for offering staff training and the reduction of excise duty on wine served as part of a meal.
The RAI also called for the prioritisation of a food tourism strategy and the establishment of a dedicated restaurant division in Fáilte Ireland.
The association’s chief executive Adrian Cummins said 21,000 jobs were at risk in the restaurant sector “which could result in a €700m annual loss in tax revenues to the Irish economy”.
Mr Cummins said the restaurant sector employed 64000 people and contributed €2 billion to the economy annually.
He urged the Minister for Finance to help tourism to become a significant driver of the economy’s return to growth.
“Restaurateurs have adapted to the downturn, by reducing costs and menu prices. A series of urgent actions are now needed as the current business environment is unsustainable.”
“A vibrant restaurant sector is crucial to a successful tourism product,” he said.