FINNISH RESTAURANT OWNERS ARE CONCERNED ABOUT BANKRUPTCIES OF 28% OF COMPANIES

Measures to combat the coronavirus pandemic, taken by the authorities of Finland, threaten to bankrupt almost a third of the companies operating in the tourism and restaurant business. Public catering enterprises have come under restrictive measures which have been in force in the country for a month and a half until the end of this week. According to the poll conducted by the Finnish hospitality association MaRa, 28% of enterprises may declare insolvency in the next six months.

The six-week period in which food service outlets could only operate in a “take away” format brought significant losses to the business owners. On Monday, many of them will be able to open their doors to visitors, however, in some areas of the country (in particular, in the southwest, where the level of COVID-19 infection continues to remain quite high), the sale of alcohol will be allowed only until 17:00.

Many establishments will be required to close their doors to visitors after 18:00p.m.

Given that the hotel and tourism business has been idle for a long time, and the borders remain closed, the damage to the industry is enormous. The CEO of MaRa Timo Lappi, who owns the restaurant group, describes the continuing restrictions as "outrageous." According to the head of the association, the regional authorities and the government should lift the restrictions as soon as they turn out to be disproportionate to the damage they cause to the country's economy. The Finnish parliament has repeatedly pointed this out to the government.

MaRa demands that the business should be provided with serious economic support of the authorities, including the allocation of about € 10 million from the budget. The companies that previously were members of the association have already received € 5 million from the state, allowing them to stay afloat for some time.

On Tuesday, Mara published a survey of market participants, according to which more and more restaurants are on the verge of bankruptcy.

It is planned that the turnover of 66% of HoReCa companies will fall by at least half in the period of April-June 2021 compared to the same period in 2019. By October, 3% of companies, including hotels, resorts and restaurants, will be closed. Compared to the polls conducted in early March, the number of companies that are at risk of bankruptcy increased from 24% to 28%.

Market participants associate the greatest threats of bankruptcy and liquidation with the services of organizing travel programs (44%), parties and catering (43%), the work of pubs and nightclubs (37%), restaurants (33%), hotels and spa centers (32%). At the same time, the MaRa association supports the idea of ​​the European Commission to reduce the VAT on restaurant services from 10% to 5% for a period of one year. The Government may make this decision very soon. It is planned to enter into force on July 1, 2021.