The catering sector is going through a crisis?

Whether the habits of the population or cafes are not overwhelmed by the deterioration of the economic situation, the businessman Gediminas Balnis commented more on.

– Recent research shows about changed Lithuanian habits. How does it affect business?

– It is very strange here that these are reflections, because it is not a rocket science – the state has raised taxes, we have raised prices and automatically customers are no longer available, businesses go bankrupt. In Ireland, VAT raised VAT from 9 to 13.5 percent. And we achieved the fact that it closes around the bar every day. Lithuania is a smaller country, so maybe one two -day catering facility closes.

– You are the owner of more than one cafe. How are your business doing?

– 22 % of the euro is paid from one euro. taxes in various form, while business remains 1 percent. We fight how to survive. We waited for a new government that promised to reduce taxes, we didn’t get it – now we’re waiting again.

Photo by J. Kalinskas / ELTA

– Perhaps it is harder to stay for network cafes: more employees, less motivated, indifferent. And the family restaurant, where the whole family is involved, stays better?

– First of all, even the profitability of such successful restaurants is very low. But let’s look at the total number: when the entire sector grows by 0.9 percent in February and the cost is 10 percent. and more. We can always find success, but if it is one in a hundred, do we really want it, do business have to live?

It seemed to me that coffee cafes would be less affected after taxes, but it turned out that it actually had the most hit. There will always be such individual success, but overall the market – say, we talked to Kaunas businessmen that in 2008-2009, when there was a crisis all over Lithuania, turnover was decreasing by 30 %, wages and rents decreased. And now, the crisis in one sector, but the rent is still rising, we still have to compete for employees and the turnover is not growing.

– How does the country’s economic situation determine the activities of cafes?

– We got such a Molotov cocktail. Other countries that have raised VAT and we are the country – our neighbors Russia, Kaliningrad, Belarus were Top 3 countries under tourism. On the contrary, Lithuanians are taking money. Tourism seems to be recovering, the airport is recovering, but not because tourists are coming – Lithuanians leave Lithuania more.

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– Is it better to close the business than to try to raise the old one and open it in place?

– Of course, the shadow is very strong now. Yes, we see that there is more VAT, but we also see that salaries suddenly stopped last year. The rise of salaries has not stopped anywhere, as – the restaurants leave for construction, simply switch to the shadows.

We are already estimating that in 2025 the state will lose $ 160 million due to the shadow. and it is estimated that VAT was EUR 140 million. more. How can more if only 140 million have been collected? For example, Mindaugas Lingė, a former head of the Economic Committee, predicted that $ 220 million would be raised. more, and we only collect $ 140 million. And no one counts the shadow. Our wages are 36 percent. And from here, a shadow comes from.

Photo by J. Kalinskas / ELTA

– What kind of help from the state to a catering business and how would it change the situation?

– the same Ireland – from 13.5 percent. Returns to 9 %, Germany from 19 %. Returns to 7 percent. We are looking forward to the Hotrec conclusions, a European studio in Brussels, which does not see any other option, how to apply the value added tax reduced to the catering sector.

– If not – what are the predictions for the future?

– This sector, instead of the fact that the Ministry of Economics and Innovation would increase by 50 % by 2030, will stagnate at less than 3 %. from GDP. And the European Union average in this sector is 10 percent. We simply do not want to pick up easily dropped money. 90 percent of the money you spend in the catering establishment. They return to the economy. If you buy an iPhone – 90 percent. Leaving for America and everything, the cycle closes.