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News & Views

Guild of Bangladeshi Restaurateurs campaigns against VAT increase

The members of The Guild of Bangladeshi Restaurateurs (GBR) have voiced their concern over the recent increase in VAT from 17.5% to 20%. They feel this increase will affect the curry restaurant sector adversely, through a loss in revenue, while over- heads remain fixed. Furthermore, with the 2.5% rise in VAT, restaurant owners say they have already noticed that the cost of many ingredients has also gone up substantially.

Restaurateurs are not able to simply increase the prices on the menu as this will put off diners coming to eat at their establishments, GBR argues. They therefore ask the government to reduce the level of VAT as applied to the restaurant sector in a way similar to France, where VAT on restaurant meals was reduced last July from 19.6 per cent to 5.5 per cent, until the reces- sion is over. If nothing is done, GBR predicts that many curry restaurants

may close down before the Olympics in 2012, which they hope would generate more business.

According to Imam Uddin Regional President for Staffordshire of the GBR,”The VAT increase has come at the worse possible time for our industry, as we have just been through a reces- sion and the harshest winter in many years. Pushing up our costs at a time when we cannot pass on this increase will squeeze our bottom line and many will not be able to survive.”

The experience in France of the tar- geted VAT cut has been very positive, with one recent study by Gira Conseil finding that around 25,000 restau- rants had been saved from closure. The number of restaurants entering administration or going bust rose by 1.35 per cent last year, compared with a 4.85 per cent increase across all sec-

tors of French business.

To benefit from the cut, restaurant and cafe owners were supposed to sign a contract agreeing to drop the price of at least seven key menu items and improve staff pay and access to train- ing. Soon after the tax break came into force, consumer groups complained however that restaurants were failing to pass any of the rate cut on to cus- tomers in the form of lower prices.

There is also growing pressure on the British government to cut VAT on fuel, which would have a knock-on benefit for the restaurant trade. With petrol costing more than £1.30 a litre, many motorists have complained that they are being priced off the road. The Labour Party is pressing for VAT on fuel to be reduced back to 17.5 per cent, and is asking for LIberal Democrat support.

Asha’s top chefs in global cook off challenge

The head chef at Birmingham’s award- winning Indian restaurant Asha’s flew off to Dubai in February for a culinary get together of the multi-national chain. Guneet Singh Bindra met up with colleagues to come up with a new menu to be launched in April. The idea was to pool their expertise to produce exciting dishes that can delight cus- tomers around the world.

Asha’s, launched by Indian singing star Asha Bhosle, has restaurants in Dubai, Kuwait, Abu Dhabi, Doha and Bahrain as well as Birmingham’s Newhall Street outlet. The brand has big plans for further Middle East expansion, as well as setting up a chain of 20-

plus restaurants in the US, and opening in Indian cities such as New Delhi and Mumbai and the fashionable resort of Marbella in Spain. Asha’s would also like to have an outlet in every major UK city.

Spice Business Magazine 9 March 2011

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