More than 570 restaurants, cafés and other food-led businesses have closed in Ireland since the Government hiked hospitality VAT last September.
The Restaurants Association of Ireland (RAI) has said the businesses have been faced with a decision to either "erode their competitiveness or take a 4.5% hit to the bottom line" when energy and food costs are already high.
It said the decision forced many to close their doors – insisting a large number would still be open if the lower VAT remained in place.
A total of 45 restaurants, cafés and other food businesses ceased trading in July alone.
Green Party leader Eamon Ryan said the "significant" measure of the reduced VAT rate had to end last September.
Source: RAIA total of 45 restaurants, cafés and other food businesses ceased trading in July.
In a recent survey, 74% of RAI members said they believe they will have to close their businesses if the VAT rate is not restored to 9%.
The RAI has long called for the rate to remain at 9% to ensure the long-term viability for the industry – and today CEO Adrian Cummins said many businesses are barely holding on
"While the pace of closures has slowed slightly during the summer compared to the tsunami we witnessed at the beginning of the year, this was expected," he said.
"Many food-led businesses are holding on by a thread, hoping the busy season will provide some relief and that the Government will act in October’s budget to restore the 9% VAT rate."
A chef prepares food. Image: Kzenon / Alamy Stock PhotoMr Cummins said there will be "another wave of closures" without action by the Government.
"The reality is that these businesses are still in crisis and, without a return to the lower VAT rate, we are guaranteed to see another wave of closures as we leave the summer behind and move into the hospitality sector’s quieter months," he said.
"The current situation is unsustainable and our members face a broken model.
"Restaurants are busy but costs have risen to an extent that has resulted in margins all but collapsing," he added.
The RAI monthly closures list is based on liquidation data provided by Vision Net, combined with notifications of non-CRO registered closures through the media, social media and the RAI’s own membership.
