2023-09-25 05:05:37
Germany’s catering industry has been fighting for months for a permanent reduction in VAT on food and drinks – and has the population on its side. This is shown by a current survey by market researchers from Civey on behalf of the wholesaler Metro, which is available exclusively to WELT.
Almost 82 percent of the 10,000 German citizens over the age of 18 surveyed online are in favor of maintaining the tax rate, which was reduced from 19 to seven percent during the Corona crisis.
Probably also because people are afraid for their favorite restaurants. According to the survey, three out of four consumers are worried that restaurants, pubs, cafés, etc. will have to close due to economic pressure. And the German Hotel and Restaurant Association (Dehoga) warns against this scenario in a public and persistent manner.
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“A tax increase at the turn of the year would have fatal consequences for the companies in the industry and their employees, but also for guests and the tourism industry in Germany,” says Dehoga managing director Ingrid Hartges. “An increase from seven to 19 percent means fewer guests and less sales – operational closures and bankruptcies are inevitable.”
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In fact, according to the survey conducted in August, almost 60 percent of those surveyed are not or are not willing to pay more money to go to a restaurant if VAT is increased again. “This illustrates the financial pressure on landlords,” says Steffen Greubel, Metro’s CEO.
“Due to the massive inflation of food, energy prices and wages, the industry has reached its breaking point – and many citizens can no longer or do not want to afford further price increases when eating out.” From a regional perspective, the willingness to spend additional money is lowest in Saxony on the age of 18 to 29 year olds.
Dehoga boss Hartges makes it unmistakably clear that prices will rise if the usual tax rate returns and refers to an internal association survey. Afterwards, more than 90 percent of entrepreneurs are forced to charge more money for food and drinks. “Only with the seven percent has it been possible to at least partially offset the skyrocketing costs.”
Nevertheless, the price level has risen so much in recent months that sales and guest numbers in the catering industry are below expectations. “We are still a long way from the pre-crisis level,” reports Hartges, referring to the latest figures from the Federal Statistical Office.
A third more bankruptcies than in the previous year
According to this, sales in the hospitality industry in the period from January to July were 9.8 percent below the values of the last pre-Corona year of 2019. For caterers, on the other hand, it was 8.7 percent. “This means that the hospitality industry is heading for its fourth year of losses in a row,” says Hartges, who says the industry has already lost around 36,000 businesses in the pandemic years of 2020 and 2021.
The financial information service provider Crif currently sees a good 14,200 restaurants, pubs, snack bars and cafés as being at risk of insolvency, which is almost twelve percent of all businesses for which the experts have information on, for example, balance sheets, profit and loss statements, payment histories or dunning procedures and debt collection monitoring.
Insolvency has already occurred in 743 companies in the first half of the year, as Crif reports. That’s almost 30 percent more bankruptcies than in the first six months of the previous year.
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For comparison: According to Crif, bankruptcies across all sectors rose by almost 17 percent from January to June, a little more than half as much as in the catering industry. In addition, according to industry experts, there are numerous silent closures by restaurants, bars, cafés, etc., i.e. business closures without prior insolvency proceedings.
In the survey, almost 92 percent of those surveyed believe that gastronomy plays an important or very important role in attractive city centers and regions and a good 89 percent believe that the businesses are very important for a lively society.
“A return to 19 percent VAT would not only be a blow to the heart of the catering industry with almost two million employees in Germany, which politicians barely saved during the pandemic. It would also be a blow to the heart of our inner cities and rural regions, because along with gastronomy, valuable places for exchange and encounters also disappear,” comments Metro boss Greubel, whose company, as a supplier to the hospitality industry, is also dependent on a flourishing gastronomy sector .
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Politicians have not yet made a decision on how to proceed with the issue of VAT for food and drinks. The traffic light parties also want to take their time. The tax estimate will come at the end of October and only then will it be possible to predict how much financial scope there is for an extension of the seven percent rule, which costs the state around 3.4 billion euros annually.
An attempt by the opposition to create facts now has failed: a proposal from the CDU/CSU parliamentary group for a permanent reduction did not find a majority in the Bundestag last week. The industry’s concerns are understood, but a decision will not be made until November, the traffic light groups announced uniformly.
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