He points out that the closures in 2023, 28 of which were due to retirement, occurred "in a good year". "2024 has been very tough for the sector. We calculate that they will treble and we don't rule out this forecast being exceeded."
Ever since June the restaurants have been complaining about a fall in turnover attributed to lower spending. But Ferrer is now focusing on costs and the degree to which they have eroded profits. These have gone from being close to 20% to 6%-8%, and these are the "best of cases". He says that it is increasingly common for some restaurants to operate in the red at certain times of the year. This ultimately leads to their closure.
Ferrer highlights the extra costs because of insularity, the rise in prices, the cost of labour, the increase in tax pressure and bureaucratic obstacles. "We are being suffocated."
"Raw materials are 12% more expensive than in Spain as a whole. We pay up to four times more for rent, we have the most expensive collective bargaining agreement, we have difficulties in finding staff as fewer and fewer people want to come to Mallorca because of the high price of accommodation.
"We can't serve a beer and a tapa for 1.50 euros as they do in some places on the mainland; here it is totally unviable. The price of food is increasingly higher. Rents have also risen a lot, so have the cost of electricity and the rubbish tax."
High taxation is one of the sector's criticisms. "It is abusive in Spain in general, but even more so in the Balearics." As an example of this, he points to the waste incineration rate, which is "non-existent in other regions" but which has to be paid even when restaurants are closed during the low season. "If we don't generate waste, why do we have to pay for its treatment?"
There are also the bureaucratic obligations that keep on being added to. "The authorities ask us for more and more plans and protocols, all with their consequent expenses that we, the business owners, have to assume." As examples he cites the carbon footprint, the prevention of occupational risks, equality plans and medical certificates for employees.
Inspections don't help. "They look at us with a magnifying glass. There are businesses around us that do not comply with the regulations. They know this but do nothing. They go to those they know will pay the fines; the aim is solely to collect fines revenue."
* Earlier this year it was reported that there are around 9,000 bars and restaurants in the Balearics. A specific figure for Mallorca was not given.
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Zoltan TeglasThis may interest you https://app.congreso.es/consti/estatutos/sinopsis.jsp?com=68
Zoltan Teglas“Our” local government took full advantage of charging the maximum rate possible when the regions were allowed to charge extra to help subsidize the health service. The cost of living and people’s struggles to pay their bills was the last thing on their minds. Quite the opposite.
Zoltan TeglasIf you think the Canary Islands tax regime is unfair, you should check out the one that was granted to the Basque Country.
DilThat's strange and totally unfair. So can each autonomous region just choose the tax rate on fuel for example? If so why doesn't our local government do the same to help out people struggling with the cost of living.
Zoltan TeglasCanary Islands don't really have IVA. These places have their local tax system that isn't like the most of Spain. If we pay 21% IVA on fuel they pay something around 7%.
Many of the Pa amb oli places won't be missed. Good restaurants are as busy as ever. Have you tried getting into Stagier Bar, 3 sittings a night, full every night, its great food, reasonably priced and in Oct you still have to book 2 weeks in advance. Quality will always shine through.
My observation is that this year more restaurants have opened up especially in the coastal resorts. There is only one pot of money from people, so some will suffer and have to close.
Zoltan TeglasLower taxes
This unfortunately is part of the overall economic Downturn and has followed the path of most small family business’s on the island Globalization has played also a large part in the Destruction of the small unique family bussiness the people that stay in All included hotels don’t even buy a coffee outside the hotel and speciality shops selling local stuff don’t exist at all , people also fiquered out during Covid how much money they saved staying at home and actually food is also good 👍 but love and enjoy a nice evening Out , tough times .
The fact that Mallorca is an island has always been used as an excuse for the high costs of everything. I was recently in Tenerife and petrol was 1.25€ a litre - so why is it so much more expensive in Mallorca?