The price of a humble breakfast roll could rise by 25% if the special hospitality VAT rate is not retained, it was claimed yesterday.
The news comes hot on the heels of recent hikes in the price of alcohol that has seen some pubs charging almost a €10 for a pint. Now increases in the cost of the breakfast staple could be next due to VAT rules around the sale of hot food items.
The levy is charged on hot food in your average deli or forecourt but not on a cold sandwich, so breakfast rolls and other hot sandwiches are in the firing line under the proposed hike. The hospitality sector currently has a special concessionary VAT rate of just 9%, which was introduced to help the struggling sector through the pandemic when it was forced to close and its aftermath.
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This is due to run out at the end of this month and all the indications are the Government wants to hike it back up to its previous rate of 13.5%. It means a €10 lunch could be off the menu as industry sources said a restaurant or pub would have to charge up to €2.50 more if the VAT rate hike is approved.
This is because of the rising costs of business and production in the current climate linked to the proposed return to the old VAT rate, which businesses argue is a 50% effective hike. The Restaurants Association of Ireland’s chief executive Adrian Cummins told the Irish Mirror last night the increase would see “substantial increases to the bottom line”.
He said: “Restaurant operators are at their wits’ end. This proposed hike from the Government would see substantial increases to the bottom line for businesses, something which many will not be able to sustain.
“Also, the damage to Ireland’s reputation as a good-value destination will be immense.” A spokesman for the Licensed Vintners Association – many of its members offer food – said: “Any increase would be Government-imposed inflation at a time of rising prices.
“We really hope that sense prevails and there is no change to the VAT rate for hospitality. We hope that the current rate remains until costs stabilise and consumers aren’t going to be further hit in the pocket by the Government.”
A leading restaurant owner told the Irish Mirror last night that if VAT is increased, prices will have to rise considerably and that will inevitably be passed on to consumers which could have implications for demand and, in turn, jobs.
She said: “I’m trying to do my best to keep prices down, but it’s impossible. Now, if they put the VAT up, I’ll have to pass on the cost increases and I’d say that will see prices go up by 25% or so.”
And when asked what she thought about the humble breakfast roll being hit by the VAT hike as well, she replied: “same rules apply”. A senior industry source said the sector is getting “pissed off” with the Government.
He added: “What if every pub in the country put a line at the top of their menus saying, these price increases have been brought to you by the Irish Government.”
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