I recently attended the Association of Catering Establishments’ annual conference, which shed light on the state of the local catering industry.
The industry’s figures speak for themselves. There are 2,636 catering establishments registered with the Malta Tourism Authority and about 400 more licensed with the Trade Licensing Unit.
Catering establishments employ over 30,000 staff members, which amount to 10.2% of Malta’s aggregate employment total of 291,000, according to recent data issued by the National Statistics Office. These figures highlight the importance of the industry’s direct and indirect contribution to Malta’s economy.
Notwithstanding its role and relevance, it was clear from the debate during the conference, as well as from the discussions I’ve been having with the industry, that the challenges are huge. They are bigger than the man in the street might imagine.
The challenges are related to a scarcity of good human resources, an increase in the price of raw materials and the growing oversaturation, just to mention a few.
The challenges are often the result of hasty decisions taken by the government, which has introduced overcomplicated procedures and impractical concepts that tend to aggravate the situation for many operators. It’s a situation the industry has experienced with the introduction of the Skills Pass, the BCRS system as well as new licensing procedures.
This is not to mention the alarming figures published by ACE a year ago on the impact of costs on their bottom line. In a sustainability study commissioned by ACE, respondents noted that, on average, labour costs were the highest costs they incurred, eating up an average of 26.6% of their revenue from sales. Raw materials came in second place, consuming an average of 20% of catering establishments’ sales revenue. This situation adds insult to injury when one looks at the reality of catering establishments in Gozo. The Gozitan catering industry is further burdened by its double insularity, an inadequate infrastructure, frequent power cuts in summer and high reliance on Maltese “tourists”.
This is a situation the government cannot ignore with a business-as-usual approach. The ostrich attitude is not an option if the Gozitan and Maltese catering industry is to survive.
The conference sent a clear message that the government must take note of. There are issues across the board.
The industry deserves a government that has a true vision for catering- Alex Borg
Pity the minister for tourism dropped out at the eleventh hour due to other “unexpected urgent commitments”. It would have been an opportunity for him to hear from the horse’s mouth the reality of such an important pillar of Malta’s economy. It would have been a chance for him to realise that this is not a “business as usual” situation but, rather, an alarming one that demands immediate action.
The industry should not get its hopes up high given the poor initiatives in Budget 2025 for the tourism and restaurant sector and the even poorer measures for Gozo.
The government keeps ruling out the initiative proposed by ACE on value added tax cuts for catering establishments. This is an anomaly the industry continues to face – after all, Malta has the sixth highest VAT rate on food in restaurants within the EU.
It’s a bitter pill to swallow for the industry because all it has achieved over the past decades owes much to its members’ resilience, perseverance, determination and vision.
The industry has made great strides over the past years. There are now Michelin star restaurants on the island and local restaurants are included in Forbes Travel Guide’s rating and Michelin Guide lists. This is clear proof of the local catering industry’s potential.
The industry’s success is down to the individual successes of various operators in Malta and abroad and to those who have gone through thick and thin.
The local catering industry deserves better. It deserves a government that not only listens to the industry but also acts. The industry deserves a government that is not reactive but proactive, providing initiatives and making decisions that ensure the sustainability of all catering establishments.
The catering industry deserves a government that create structures and systems that does not complicate matters but, rather, ensures fluid day-to-day operations.
Above all, the industry deserves a government that has a true vision for catering based on concrete goals that would see the sector thrive rather than struggle to survive.
Alex Borg is the Nationalist Party’s spokesperson on Gozo.