The Government is to reconsider its compensation package for restaurants, cafes and licensed premises after a chorus of complaints that the deal, unveiled just 24 hours before, is deeply flawed.
The €123 million plan included an element worth €83 million to cover lost revenues during the time that businesses were legally obliged to close from early April until end of May. The amount each restaurant, cafe or bar could claim was calculated at 15% of the difference between their average January and February takings, and what they made in April.
Centre Party ministers were the first to break cover and concede there’s a problem that needs to be looked at more closely. Minister of Economic Affairs Mika Lintilä told Talouselämä that he wants Parliament to see if there are alternatives to using January and February as the best comparison months, saying he’s aware there are many seasonal restaurants in Finland.
Minister of Finance Katri Kulmuni (Centre) tells News Now Finland in a statement that she appreciates many restaurants have low sales at the start of the year and that “these important issues will be taken into account in the parliamentary deliberations.”
“As many restaurants as possible will receive support” says Kulmuni.
Restaurant owners critical of government’s process
At One Bar & Restaurant in Porvoo, owner Petter Larsen is ready to open up again for business as soon as legally possible.
Although he’s been working with a small core team to pivot the business and offer meal boxes and menu plans, it simply can’t attract the same levels of revenue as a busy bar and restaurant, open from breakfast until dinner time.
The government’s plan to look at January and February income levels was a non-starter for Larsen because those are the quietest months of the year.
“I’m most upset about the attitude of ministers in the government, even though the government is lead by younger people. The attitude towards the restaurant industry has not changed since the 1990s” he says.
Another criticism is that restaurants were encouraged to apply for grants from ELY Keskus and Business Finland to develop new ways of working – but any money received through this funding route will be deducted from any future payments that are meant to cover lost revenues.
For restaurant and bar owner Larsen, that’s a glaring disconnect.
“A lot of people organised take-out sales, home deliveries, or built an online store even though they knew this business wouldn’t be profitable. It was done solely because the government announced this was the only way to receive support” he says.
Industry association pushing new calculations
The Finnish Hospitality Association Mara says they would usually be able to give input into new legislation about their industry, but since this latest package was pulled together so quickly the normal procedures weren’t followed.
“In this case we never had the occasion to comment. Always when you’re doing legislation in a hurry, when the government are not experts in the restaurant business, these kind of mistakes gets into the proposals” says Mara CEO Timo Lappi.
“We are happy if they are going to change the process now because our member companies were not happy, everyone was contacting us. Everyone knows January and February are lousy months, right after Christmas with ‘Alcohol-free January’ and nobody is spending money” he tells News Now Finland.
Mara has pressed the government to use April and May as the benchmark months for calculating lost revenues and says that in an industry that had a turnover of a billion euros in April and May 2019, the kind of money the government has put on the table so far is not nearly enough.”
“Our companies don’t have money, and when they open the restaurants at the beginning of June they must have more money for wages and rents.