It’s the perfect time to dine out in France!

PRLog (Press Release) – Jul 14, 2009 – The French government  lowered VAT on restaurant food from 19.6% to 5.5% on the 1st July 2009. The government hopes that this move will help boost the restaurant industry (one of the country’s biggest industries) which has suffered quite badly during the economic downturn. The price cuts should hopefully entice people to eat out more thus improving the state of the economy. Finance Minister Christine Lagarde says “As restaurants lower their prices, they can invest. Employees will feel the benefit, and consumers will feel the benefit. Everyone wins”.
Nine professional organisations within the catering industry have signed a contract called the ‘Contract of the future’ comprising of four parts:
Prices

In return for the reduction in tax, restaurant owners are recommended to reduce their prices by 11,8% on seven different items out of a list of ten. These include the dish of the day, set menu with entrée and main course, set menu with main course and dessert, children’s menu, desserts, mineral water, fizzy drinks, soft drinks, tea and coffee.  However, alcoholic beverages are exempt from the tax reduction. Coffee priced at 1,60€ will now cost 1.40€ and for a fixed menu at 20€ you will save yourself 2.40€. The restaurants choosing to take part in this VAT reduction will let their customers know by putting up a small poster stating clearly which items of food and drink are reduced.  
Employment

Catering unions are to create 40,000 jobs over the next two years of which 20,000 will be permanent or temporary and 20,000 will be apprenticeships or professional contracts.
Wages

Negotiations are taking place on the subjects of pay, training and welfare of employees.
Modernisation

Restaurant owners will be encouraged to make improvements such as making their restaurant more accessible for people with reduced mobility, improving comfort for customers, computerisation and recycling.  The industry will benefit from subsidised loans of 15,000€ which will be awarded through a specially created modernisation fund. The aim is to provide the catering industry with one billion Euros over three years.
This reduction in restaurant food tax, which is anticipated to cost the French state more than 2 billion Euros was an original electoral pledge made by President Nicolas Sarkozy. It had been repeatedly pushed back by previous President Jacques Chirac. After severe campaigning by the French, it was authorised by EU authorities earlier this year. And instead of being introduced on 1st January 2010 as originally planned it was brought forward to 1st July 2009. Restaurant owners had wanted the cut in tax for over a decade as they hoped it would take people away from fast-food restaurants where they already had lower taxes and prices and would instead bring them back to sit-down restaurants. The reduction in tax should hopefully reassure restaurant owners that their number of customers will increase. Recently, restaurants have lost many customers due to France’s worst recession in 30 years and the ban on smoking in cafés and restaurants.
These reductions in prices could not have come at a better time: the start of the holiday season! Hopefully this will encourage French citizens and tourists to make the most of this reduction and will start eating out in restaurants more.
With cheap air fares and train tickets (Eurostar are currently offering £59 return to Paris, Brussels or Lille) you can easily afford a day trip or weekend away to France to enjoy some delicious French cuisine at a lower price.
(But be careful, because restaurants are not under any obligation to reduce their overall prices. The effect of the reduction in tax on overall consumption could be limited in certain restaurants. Be sure to look out for the small posters advertising the reduction in the window).

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