Restaurants fear inflation’s paralysis as stock prices rise in the shadow of war

A rise in prices for raw materials and essential foodstuffs is gravely affecting Maltese restaurateurs and their industry’s sustainability.

Three in four industry respondents in an online survey by the Association of Catering Establishments (ACE) have complained about the increase in stock pricing seriously hindering the sustainability of the industry.

The 76% figure was higher than the 71% of respondents who had reported stagnant sales in the pre-COVID period in 2019. “When comparing the same period with the fist COVID-19 pandemic year (2020), almost 65% confirmed their sales were better.”

Before the war, Ukraine was the world’s largest exporter of sunflower oil. The conflict has now paralysed harvests for edible oil, raising the price of remaining stocks. With supply chains already disrupted by COVID-19, war in Ukraine is now causing shortages in some ingredients like sunflower oil and raising the price of substitute ingredients.

Ukraine and Russia together had accounted for about 75% of sunflower seed oil, a primary cooking oil in many parts of the world.

ACE said 76% also said profitability was a major issue, followed by human resources retention and recruitment challenges. 41% complained about banking and other bureaucratic hurdles.

Yet 60% said they were against a practice to charge a deposit on bookings so as to counter the problem of no-shows.

“When assessing the survey holistically, it is evident that sustainability is the major issue of concern and this is attributed mainly to the impact of the COVID-19 pandemic together with the sudden spike in the stock purchase pricing index as well as the recurrent problem of human resources,” ACE said.

“This survey stresses the need for closer collaboration between the government and the main stakeholders in the industry. Such action is needed not only in the long term but most of all in the immediate so as to ensure the sustainability of the catering industry.”