Rents will cause bankruptcy, restaurants warn


Tista' taqra bil- Malti.

The catering lobby has warned that restaurants will be driven to bankruptcy and insolvency if commercial leases are not regulated.

In a statement on Sunday, the Association of Catering Establishment (ACE) called on the government to regulate commercial rent for catering establishments retrospectively from 1 March.

ACE called on the government to regulate maximum rent per square metre as a coronavirus emergency measure. It added that the government must lead by example and waive all rents on government owned land.

The lobby warned that if commercial leases go unregulated then the government efforts and the sacrifices made by both businesses and employees will not continue to sustain pre-pandemic employment levels, leading to laying off of staff.

Restaurants and bars were allowed to re-open on Friday subject to a number of regulations. According to the association, the restaurants have reported revenues equivalent to 10% of previous levels. The rental expenses are peaking to at least 50% of the turnover, the association said.

The association warned that commercial leases will be the main cause of bankruptcy and insolvency of restaurants, if they go unregulated.

“All efforts being made by restaurants to increase their liquidity and control the more variable cost components of their operations will prove futile if they continue to be charged unwavered rental rates.”

The association accused landlords of being short-sighted despite having flourished before the coronavirus outbreak in Malta. The association urged the government to step in.

ACE had already called on the government to consider offering tax exemptions to landlords who reduce their commercial rent by 50%.

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