Come dine with us

John Burns

 

 “Loads of people I know have gone out of business, and many others are terrified,” says Jay Bourke, one of Dublin’s best-known restaurateurs. He lists the fallen: Hugh O’Regan; the O’Dwyer brothers; the owners of Locks restaurant on Dublin’s Grand Canal, which went into liquidation last week.

“Next year is going to be worse,” he predicts. “I am strongly considering moving to London. Why would you bother here? In London the restaurants are better staffed, because they can afford them. That means better service, which means people come back. This is not a good place to open a business. The notion that the likes of myself are creaming it is absolute crap.”

The owner of a hospitality empire that includes Eden, Bobos, the Market Bar and Cafe Bar Deli has a long list of gripes about a government that he insists is pushing him out of business. There’s the upward-only rent reviews, the requirement to pay a “ridiculous” minimum wage, dealing with a “mind-blowing” number of quangos and a decades-old system of licensing laws that are labyrinthine in their complexity. London looks cheaper, easier, simpler.

Bourke’s list of gripes have been moulded into a 10-point menu of demands by the Restaurants Association of Ireland (RAI) and served up on the eve of the budget. The lobby group claims that 80% of restaurants are making a loss and that, of 64,000 jobs in the sector, one-third are at risk.

“We’re saying 250 restaurants [out of 2,500] went to the wall in the last six months,” says Adrian Cummins, the association’s chief executive. “A couple of simple changes to legislation would help us.”

The key demand is to reduce the minimum pay rate in the catering sector. This is not €8.65 per hour, the national minimum wage, but €9.32. The rate is set by one of 19 Joint Labour Committees.

“If you factor in a 33% Sunday premium on top, it’s €12.40,” says Cummins. “That’s the law and it’s killing business. We have cut every other cost possible and all that is left are wage levels. We are 54% higher than Spain and 23% higher than in the UK. That’s unsustainable. Let the free market dictate what’s paid.”

That’s for starters, and then the RAI moves on to a main course of demands: a cut in the 21.5% Vat rate on the drinks portion of meals and allowing companies to claim back Vat on corporate dining. There are some exotic requests on the dessert menu, such as free travel for all pensioners who visit Ireland.

But aren’t restaurants just another sector that had it good in the boom times and now want a handout from the state to get them through the recession? And how sympathetic is the public, which is spoiled now with early-bird discount deals but remembers, not three years ago, being charged €25 for a main course that didn’t include vegetables.

“I don’t think there will be much sympathy,” agrees Tony Foley, a senior lecturer in economics at Dublin City University. “But there might be, if the argument was made that we are facing the prospect of tens of thousands of low-paid jobs disappearing because businesses can’t keep operating due to the cost base.

“The government’s own figures suggest that we’re over-priced and our wage rates are too high. Forget the morality and politics of the minimum wage — if it was the right rate for 2008, then it’s the wrong rate for the end of 2009. The government is keeping the rate at what it was when the economy was doing well. The same with commercial rates — there’s no notion of them going back to what they were in 2004. So a lot of restaurants’ costs are stuck.

“Meanwhile total employment is going to be down 10% by next year. That means, straight away, 10% fewer paying customers.”

You wouldn’t build a restaurant now, says Bourke. Twelve years ago he paid IR£350,000 — €1m in today’s money — on Eden in Temple Bar. “If you look at the accounts you will see a steady increase in costs and rent to the point where there’s nothing for the operator, me, and to some extent you go, ‘Why would you ever do that?’ So would I do that with €1m now? Not on your nelly.”

In theory, Campagne in Kilkenny could not have opened at a worse time. Garrett Byrne, who had spent five years as a chef at Chapter One in Dublin, decided to return to his native city and opened in September last year — just as the economy was falling off the cliff.

“The most important opening of the last year in terms of a really classy restaurant hitting the ground running from day one was Campagne,” says John McKenna, author of the Bridgestone guides. “It’s been a phenomenal success. You can’t get in. When Garrett Byrne opened you’d have said, ‘Jaysus, the poor guy, Kilkenny is not a big place and it already has good restaurants and there’s no money in the economy.’ But he’s had a phenomenal year.”

Byrne agrees that business is booming. Up until August, it was consistent; then he won a couple of awards and since then business has risen 20%. To get a table on a Friday or Saturday, you have to book two weeks ahead.

“I think anyone who is trying to do something with a little bit of quality is holding their own,” says the chef/owner of Campagne. “People are spending their money more wisely, maybe. We are benefiting from people taking a weekend break rather than a foreign holiday.

“Yes, the spend on wine is not there compared to previous years. The cheapest four or five bottles on our menu are the ones selling at the moment. When we started, we had three or four bottles at the €20-€22 mark — now we have more. People not only don’t have the money, but they also don’t want to be seen spending conspicuously.”

He, too, would welcome some policy changes, but isn’t optimistic they will happen. Vat is a “killer”, but he doesn’t see the government moving on that. The upward-only rent rule has to be abolished: “It’s a joke.” And music licences should be looked after by a single agency: “We have three different ones to pay, which I find bizarre.” But he doesn’t believe high wages are an issue. “You need good staff, and there’s a certain standard of living they have to maintain, too.”

McKenna, meanwhile, thinks the RAI is overstating its case. Top eateries have not just had a decent year, or even a good one, McKenna insists. “The places that we write about [in the Bridgestone guides] had a very good year, and some a record year,” he says. “I say this to people and they say, ‘yeah right’. But I was in Chapter One a few weeks ago on a Saturday night, and they had 84 for dinner and the capacity is 85. That’s almost 100%. Very few restaurants do that.

“Antonio’s in Ballydehob will be full tonight [Friday], as will Fishy Fishy [in Kinsale]. I know what the restaurants association is doing — it’s a pre-budget submission and you put the worst scenario forward. But the reality is that places have had a good year, and that’s from Neven Maguire in Cavan to, well, anyone in the Bridgestone Guide. The association is probably counting restaurants in zombie hotels. These have never been solvent. They’re dead in the water before they even start.”

McKenna believes that a love of fine dining will be a lasting legacy of the Celtic tiger, although he agrees that the average spend is down. A couple having lunch will have a glass of wine each rather than share a bottle. Corporate spending has been slashed, but that, he argues, only hits the lunchtime trade in Dublin.

“Civilian” bookings, as insiders call the non-corporate trade, are still steady, and that means rural restaurants can cope better.

“There is no corporate market in Kilkenny,” Byrne points out. “People told us that before we opened, but we knew it already. Local companies like Glanbia don’t do much corporate entertaining, so we never budgeted for it.”

McKenna disputes the association’s claim that 80% of restaurants are losing money. “If they are, there’s no way they can trade for anything more than a few weeks,” he says. “Restaurants are cash businesses, essentially. They have to keep people coming through the door and keep their turnover in order to pay staff. And so they have reacted quickly.”

From this year’s guide book, published last January, McKenna points out that only one of the top 100 restaurants has since closed. But that’s the one that everyone has heard of: Mint, run by Dylan McGrath, a Michelin-starred chef. Its closure was treated as a totem of the demise of the Celtic tiger itself.

Experts within the trade would argue, however, that Mint was just the sort of restaurant that wouldn’t or couldn’t survive: high prices, a small number of seats, slightly out of town, relying on business spend. It may have been the exception that proves the rule.