Gastronomy in crisis? A financial expert analyzes the situation and explains the background.

Gastronomy in crisis? A financial expert analyzes the situation and explains the background.

The industry association Dehoga warns that thousands of catering establishments in Germany are at risk if the VAT rate on food and drinks is raised again from 7 percent to 19 percent from January 2023. The industry is of the opinion that the federal government urgently needs money due to the Federal Constitutional Court's KTF ruling and has therefore decided to increase taxes. This decision is viewed by those affected as unjustified and perceived as threatening their existence. In recent years, the catering industry has suffered from, among other things, the effects of the corona pandemic and the energy crisis, which have further exacerbated the situation. The increase in VAT will lead to price increases in the industry and there will also be increases in minimum wages.
According to a report from www.focus.de, analyzes show that prices are bound to rise, which could lead to an increase of around 11 percent in food and beverages. It also emphasizes that the return to 19 percent VAT makes economic sense and is socially fair, as people with lower incomes prefer to buy food in supermarkets or have it delivered instead of eating in restaurants. Furthermore, statistics show that despite the tax break, the restaurant industry has significantly increased its prices and in some cases is even generating more sales than before the pandemic. However, the industry is suffering from structural change caused by changing consumer behavior in the post-Corona period and the lack of skilled workers. It is emphasized that the reasons for the industry crisis are not just due to VAT or the minimum wage, but rather are a consequence of changing consumer behavior and structural change in society. The return to the 19 percent VAT will probably lead to further price increases and increased pressure to survive in the catering industry.