COVID-19: Coming to the aid of restaurateurs

MONTREAL, April 16, 2020 /CNW Telbec/ - The physical distancing measures in effect to slow the propagation of the coronavirus are hitting the restaurant industry hard. A publication launched today by the MEI proposes solutions to help the sector.

"The situation is grave for the restaurant sector: One in ten restaurants have already closed for good, and many others are a few weeks away from doing the same," says Daniel Dufort, Senior Director of External Relations, Communications and Development at the MEI and author of the publication.

Although this sector of activity was largely spared by past recessions, it has now been thrown into turmoil. "Physical distancing measures have a disproportionate affect on restaurants, especially those that specialize in table service," explains Daniel Dufort.

Different measures can be put in place by governments to complement those already offered: eliminating property taxes for a given period, rather than deferring their payment, and temporarily eliminating sales taxes. "These measures would allow restaurateurs to keep more of their money, all while encouraging consumers to buy items for takeout or delivery," points out the author.

Selling wine directly to consumers

Another measure that could be put in place quickly is to allow restaurants to sell bottles of wine directly to consumers. "At the moment, it is only permitted to sell wine for takeout if it is accompanied by a meal and if it is sold at the same price as if it were purchased for consumption in the dining room. These conditions are difficult to respect when numerous kitchens are closed and restaurants need cash," continues Mr. Dufort.

Indeed, according to the publication, the sale of bottles of wine from restaurants' inventories is a way to generate new revenues without requiring substantial new spending.

"A poll carried out by Leger in 2017 shows that over 70% of Quebecers agree that restaurants and wine merchants should be able to sell their wine directly to consumers," says the author of the publication. "The temporary lifting of these restrictions would allow us to see if this is a promising avenue," concludes Mr. Dufort.

The Viewpoint entitled "Solutions to Help Restaurateurs" was prepared by Daniel Dufort, Senior Director of External Relations, Communications and Development at the MEI. This publication is available on our website.

The MEI is an independent public policy think tank. Through its publications, media appearances, and advisory services to policy-makers, the MEI stimulates public policy debate and reforms based on sound economics and entrepreneurship.

SOURCE Montreal Economic Institute