Munich: Visiting a café is becoming more and more of a luxury

Vollaths is one of those places where you get the feeling that it has always been there. The café on Thalkirchner Strasse just celebrated its fifth birthday this year. The operator Andreas Vollath ran it with a lot of passion even during the Corona crisis, which is why it has become a social meeting place for many.

But now Vollath is very worried. Most people have noticed that the years of loss during the Corona pandemic were a heavy burden for the catering industry. But many are not aware that inflation, price increases and high energy costs hit the hosts particularly hard.

On January 1, VAT will rise again to 19 percent

During the pandemic, politicians acted and quickly reduced the VAT on food from 19 to seven percent. This means that the bars can still absorb at least part of the increased costs today.

But this reduction in VAT is limited to the end of the year. That’s why it’s time for the federal parties to wave the application for an extension of time.

Value added tax is rising: Munich hosts are calling on politicians to take a stand

Chancellor Olaf Scholz ( SPD ) and Christian Lindner ( FDP ) once advocated such a tenure, but now it has become quiet on the subject. Vollath recently spoke to Ricarda Lang at a Green Party event. As early as March, the Free Voters and CSU parliamentary groups in the Bavarian state parliament voted in favor of a permanent reduction in VAT. Now the CDU/CSU parliamentary group has provided another.

So far, none of this has impressed the federal government. Andreas Vollath is now asking all politicians to take a stand. “Because if you don’t act now, the reduction in VAT will expire automatically.” In a current survey of 2,000 companies from Bavaria by the German hotel and restaurant association Dehoga, 96.1 percent of those surveyed stated that they would have to raise prices from January if there was an increase in VAT.

Many innkeepers used up their financial cushions during the pandemic. There were bridging aids, but these are currently being reclaimed. The small companies in particular no longer have anything on the high edge. If the VAT is now increased again, they have to beat the one-to-one on the prices.

The customary industry profit would collapse in the event of a tax increase

Andreas Vollath once calculated for the AZ what it would mean for his customers if the value-added tax increased from 7 to 19 percent from January 1st. The “Isarjogger” breakfast costs 13.90 euros in the “Vollaths”. He allowed the VAT reduction to flow into his prices. So he didn’t increase it, even though food prices, for example milk, rose by 80 percent in some cases.

At the moment he pays 91 cents to the state for a sold Isarjogger breakfast. If the VAT increases to 19 percent, his tax increases to 2.22 euros. “I would then have to increase the price for breakfast on New Year’s Eve to 15.50 euros,” explains Vollath. According to Vollath, the usual industry profit in gastronomy would be gone with a tax increase of 12 percent.

“The decisive factor is the yield, and it has fallen”: Do hosts in Munich have to give up?

“But there are also landlords who generate a much lower proportion of sales in profit,” says Thomas Geppert, state manager of Dehoga Bayern. Another Dehoga survey recently showed that 40 percent of the companies generate sales (not to be confused with profit) of less than 100,000 euros.

“Bavaria thrives on family-run individual businesses that aren’t just out for profit,” continued Geppert, and they would have to give up their business. “Because even if the turnover is still there for them: the decisive factor is the yield, and it has fallen.”

Expensive prices and a lack of staff: social meeting places would slowly disappear

People from all walks of life are still sitting in Vollaths. Some just meet for a coffee, others order breakfast. “Both are okay here. But such meeting places will disappear if everything gets more expensive,” fears Vollath. A few years ago you could eat out for two for 50 euros. Today you have to lay down more like 70 to 80 euros. Geppert worries that pensioners will soon no longer be able to afford their roast pork or that carters will move their Schafkopf rounds into private life.

Added to this is the acute personnel problem in the economies. Compared to retail, the catering industry is a very labour-intensive industry. “For the same turnover, the gastronomy needs six times as many staff as the retail trade,” says Geppert. “And there are no employees in a city like Munich who work for the minimum wage,” says Andreas Vollath. “How can you make a living from that?” But without the employees, you can’t keep the business running.

Value added tax increase threatens gastronomy: No politician is really passionate about the topic

“At the moment we have an employee labor market,” adds Thomas Geppert. In other words, employees have many options and no longer do a job at any price. Working when others have finished work, and then there is also the uncertainty: job seekers think twice before going to work as waiters.

And what is politics doing for gastronomy at the moment? “I have the feeling that there is no politician who is really passionate about the subject of VAT,” says Thomas Geppert. Dehoga now wants to draw the public’s attention to the issue and is distributing posters to its members. Perhaps the guests, including one or two politicians, will be shaken awake.

By Ruth Frommer