Catering establishments, restaurants and bars have reported a significant drop in sales following coronavirus concerns, according to the Association of Catering Establishments (ACE).

Apart from the immediate decline in sales, members of ACE have also experienced a number of booking cancellations for events such as parties. The cancellations gained a higher momentum after the new precautionary measures were announced on Tuesday afternoon.

Malta has banned all travel to and from Italy and cancelled all outdoor public events larger than 2,000 people, in an attempt to better control the spread of the virus.   

At the time of writing, there were six confirmed coronavirus cases in Malta. 

In its statement, ACE said members were now facing cash flow issues as a result of declining sales. 

ACE said the government should intervene by ensuring measures that do not lead to panic but to intervene by assisting catering establishments by encouraging banks to give a moratorium on loans; a moratorium on agreements of tax and social security payments and accept delays in VAT, tax and other payments without penalties.

“ACE believes that the above will assist in the cash flow until the situation goes back to normal and it will avoid catering establishment having to take other drastic measures such as reducing hours for employees or worst still having to ask them to delay salary payments,” the association said.  

Workers not turning up

The association also said that a number of employees at bars and restaurants had not reported to work out of fear of contracting the virus. 

“ACE disappointed about the fact that so far no compensation fund was set up by the government to compensate employees who are subject to quarantine.  This is affecting the operations of establishment particularly the smaller ones with a small number of employees,” spokesman Reuben Buttigieg said. 

“The above will not solve the current issue but will mitigate challenges for businesses and give the entrepreneurs the necessary peace of mind to engage in business development rather than mitigating measures,” he said, adding that members were being advised to abide by the recommendations of the Health Authorities.

Members have also been given access to advice on measures that can be taken to ensure an even healthier establishment environment, he said.

MHRA calls for loans repayment relief

The Malta Hotels and Restaurants Association has called on the main banks to extend a moratorium on loan repayments to the tourism and hospitality industry which was suffering a strong negative impact. 

The MHRA said that BOV and HSBC have in principle agreed to provide general support and consideration toward any areas which main be impacted by such exceptional adverse circumstances. 

Given that specific clients may require different responses, the banks have pledged to work constructively with each to agree on any appropriate support arrangements.  

The association said it also had a meeting with Tourism Minister Julia Farrugia Portelli to discuss the severity of the crisis and how to best mitigate the negative effects of the global outbreak of the COVID-19 virus on the local tourism industry.

Malta Chamber urges highest ethical standards 

The Malta Chamber of Commerce, Enterprise and Industry has called on the business community to practice the highest ethical standards when it comes to market-pricing, especially on necessary items.

“At a time of national pressure on all aspects of life, the business community has an important role to play. While safeguarding our operations, we must also act responsibly towards our patrons” said David Xuereb, President of The Malta Chamber. 

“The Malta Chamber prides itself in acting according to the highest ethical standards, and this should be no exception”, he said.

The Chamber said that it is aware that at a time of heightened demand, the rules of the market can easily provide for a price-increase. The Malta Chamber called on all businesses to exercise the maximum ethical standards in this regard.

“While encouraging operators in the supply chain to act responsibly, The Malta Chamber is making itself available to assist the competent authority, the MCCAA on any complaint, on a case-by-case basis”, the Malta CHambr said in its statement.

Casa calls for contingency measures to help SMEs 

Maltese MEP David Casa has called for contingency measures to help small and medium-sized businesses absorb the impact of the COVID-19 outbreak. 

“SMEs are the backbone of our economy and as a result of their small size, they may be less able to withstand economic shocks of unknown duration such as the one we are facing right now due to this virus outbreak. Contingency measures should be in place to assist these companies in the event of such disruption. Such measures should be triggered as soon as they become necessary,” he told the European Parliament. 

He pointed to the German model where, in the event of unforeseen economic shocks, companies have the possibility of retaining staff by having them work on reduced hours while the state compensates for the difference in salary.

“These short-term work subsidy schemes can be instrumental to prevent layoffs while ensuring that SMEs have the support they need to make it through a crisis.

Measures should not be limited to such schemes. Particular sectors, such as tourism, that are likely to be hit harder and might require more targeted assistance. We must not be complacent in assessing the measures at our disposal and putting additional measures in place”, he stated.