AHRESP says 0 VAT not enough to reduce prices in hospitality and restaurants

The Government’s decision to slash VAT on essential food items to ease the cost of living crisis will not be enough to reduce the price of meals served in the restaurant and hotel sectors.

The General-Secretary of the Association of Hotels, Restaurants and Allied Businesses (AHRESP), Ana Jacinto said it was difficult for restaurants and hotels to reduce the final price for consumers even at 0 VAT since their margins had already been reduced by food inflation of 21.5% in hotels and 10% in restaurants.
In an interview with Antena 1 and Jornal de Negócios, Ana Jacinto emphasises that these costs are being shouldered by companies and are not being passed on to the consumer.
And despite last year seeing a record year for the tourism sector with consumption having recovered, Ana Jacinto points out that all the gains made are being consumed by growing costs and that companies are not that profitable.
The AHRESP head thinks that the Government needs to reduce VAT to 6% for a year, not to lower prices for the consumer, but to alleviate the cost pressures on companies.
The shopping basket of products with 0 VAT so far includes 35-40 products including potatoes, rice, pasta, carrots, onions, tomatoes, apples, bananas and oranges, half fat milk, chicken, pork, bread, beans, broccoli and courgettes, salmon, cod, eggs and olive oil.