Restaurateurs are barely making a profit, a survey commissioned by the Association of Catering Establishments (ACE) shows. 

Statistician Vincent Marmara said hundreds of catering establishment owners were asked about their costs compared to their sales revenue. 

After considering tax the owners took home an average of 6.1 per cent in profit, the survey results showed.

ACE president Michelle Muscat said this was quite a worrying scenario when one kept in mind the role the industry played in Malta's economy with over 20,000 people employed in the sector working in around 3,000 establishments.

She said the catering industry faced several challenges, including labour shortages, increasing raw material costs, and the rise of food delivery services. 

"The impact of inflation is evident with unevenly rising prices inevitably reducing the purchasing power of consumers. It is not a very ideal scenario for the catering industry after all it has been through in the past years," she said.   

The study asked 400 owners of restaurants, bars, snack bars, takeaways and kiosks about their cost as a percentage of their total sales revenue.

It was carried out through telephone interviews in August and September this year. 

Labour, property, raw material, beverage, utility, and delivery costs were all considered. 

Labour (26.6 per cent) and raw materials (20 per cent) were the highest costs. 

When added, the total cost accumulated to 79.5 per cent, the survey showed.   

That did not account for VAT, other taxes, finance charges and other costs. When that was factored in, business owners saw a profit of 6.1 per cent, financial analyst Alan Abela said.   

ACE president Michelle Muscat said the survey officially shows that profit margins in the industry are slim Photo: Jonathan BorgACE president Michelle Muscat said the survey officially shows that profit margins in the industry are slim Photo: Jonathan Borg

Lower VAT, ACE says 

In comments to Times of Malta, Muscat said that caterers had long been saying that profit margins in the industry were low.  

"This survey shows that officially," she said. 

She said Malta's VAT rate, at 18 per cent, was among the highest in the Mediterranean.  

"I think it would be far more sustainable if the VAT (rate) is lowered," she said.  

'Where has our soppa tal-armla gone?' tourism minister asks caterers  

Speaking at a conference about the report, Tourism Minister Clayton Bartolo said that the government was working towards striking a balance between quantity and quality in the tourism industry.   

He said that the government was focusing on niche markets such as sports and faith tourism.   

He observed that more tourists were coming to Malta than in 2019 (before Covid) and they were spending more money in Malta.   

But caterers should also play their part by investing in their products.   

"Sometimes you go to restaurants, and you see practically the same menu in five different restaurants," Bartolo said, adding that restaurateurs should be looking at providing an "authentic" local product.   

"For example, why isn't the soppa tal-armla (widow's soup) an item on the menu, where has our bragioli gone, where has the rabbit gone?" he questioned.  

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