Local businesses empty-handed after 'very disappointing' budget

“We're constantly trying to keep prices low so people can come out more and enjoy going out for dinner at a reasonable price, but everything is working against us," said Jim 'Flash' Gordon, the owner of Revolution Bar in Waterford City. Like many local business owners, Flash is “very disappointed” by the Budget announced by the government last week.

The Vintners’ Federation of Ireland said Budget 2025 would lead to pubs in Waterford being forced to close if "urgent targeted financial supports aren’t introduced soon".

"The Government’s Budget will have serious repercussions for local pubs here in Waterford," the Vintners’ Federation of Ireland said, "With no reduction in VAT or excise duty, many of our pubs – especially those that don’t serve food – are left with no meaningful support."

"We expect to see further closures in Waterford if urgent, targeted financial supports aren’t introduced soon."

Flash, who also owns Oskar’s Bar on the Dunmore Road, agreed with the Vintners’ Federation. “You can see the pressure on restaurants, coffee shops, bars - anywhere serving food to sit in or take away. The prices from suppliers going up and up and up, like the day after the Budget we got a 15% increase in the price of chicken and beef from one of our main suppliers.” 

Food business owners have been calling on the government to reduce the VAT rate on food products down from 13.5% to 9%, the rate it had been during the pandemic.

“I'm very disappointed in the government that they haven't put anything in place. They haven't gone 'look, we'll take it easy on this, or that', reduce excise duty or reduce VAT. Even something small would help a lot.” 

Even reducing the rate to 11% would help local businesses to cope with the other skyrocketing prices, Flash said.

“Electricity is at an all-time high, gas is three times the pre-Covid price, the minimum wage has gone up again, the pension contribution is being pushed in middle-late next year and that's going to add another 3% to our labour overheads.

“So everything is conspiring against us. 

"I am worried that, because of the cost of opening, [business owners] will start closing Monday, Tuesday, Wednesday, like some restaurants in the city have, just to keep costs under control.”

Food businesses across the country have been shutting down at an alarming rate. 

Flash puts this down to “our margins are squeezed and squeezed, whereby I know of restaurants now who are barely at break even, and if it gets worse, they're gone.”

Even the award-winning Revolution Bar, which has previously been named the Best Whiskey Bar in Ireland, is feeling its costs increase dramatically. 

Flash ran through the eye-watering costs of running the pub, from €1,350 per month for Sky Sports, to electricity bills across his two pubs reaching €10,000 per month, and his insurance of €15,000 per year. 

The costs of running a pub look set to rise even further, he warned.

Local restaurants are under as much pressure from rising costs says the owner of Momo Restaurant, Kamila Bystrzonowska. 

"Everything is going up! The moment the minimum wage goes up, the cost of everything increases. I know the minimum wage needs to rise, I appreciate that that government has to look after everybody, but we, as independent businesses, don't feel like we are being looked after. 

"I feel like we are being punished for being self-employed." 

Kamila said she wasn't just disappointed by the Budget, "honestly, I was more annoyed."

Restaurants, she explained, have extremely low profit margins, often around 2% of turnover. This leaves them extremely sensitive to their input costs rising. 

The affect of a seemingly small reduction in the VAT rate for food businesses from 13.5% to 9% would be "huge" and a halving of one of their biggest costs. 

On paper Momo Restaurant, which is located on Patrick Street in Waterford city, is an extremely successful restaurant, she said. 

"We can be fully booked during the week, we have to refuse tables every night of the week because we are full, but the costs of running the business are so huge that I am left asking what the point is. It doesn't translate to my quality of life, doesn't benefit my bank balance." 

"We have no time to look at the bigger picture of the business, we are stuck chasing our tails constantly," Kamila said, "We are stuck asking 'How do we manage? Do we have enough money? Eventually you ask yourself, is this worth it? Do I actually make any money?"

She said she doesn't want to increase prices, doing so will price her customers out of the restaurant but the rapidly rising costs of utilities and staff costs leave her with no alternative to do so just to remain in business. 

"I don't want to put my prices up, I don't want to lose by customers. But at the same time, it's a catch twenty-two, if I don't put my prices up I am going to be losing money.

"The easiest and most efficient way to give businesses a break and keep prices the same is to reduce the VAT rate down to 9%. I know the Budget is done, if I'm honest with you I am not hopeful that anything is going to change. It's just extra stress for all of us." 

The rising costs of running a food business are putting so much pressure on business owners across the country that startling numbers of restaurants are closing. Bystrzonowska puts this down to the VAT rate. 

"I could see the restaurants, the bars and the cafes were thriving when the VAT rate was at 9%," she said. When the pandemic ended and VAT went up to 13.5% business started struggling again.