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Support for restaurants unveiled: information now needed on how restaurants will be opened – “no need for many tables” in June

A two-part support package has been unveiled for restaurants which will, on the one hand, support re-hiring of staff, and, on the other, compensate for the disadvantages caused by restrictions. Restaurants were closed on 4 April with the exception of takeaway and deliveries. The total cost of the package is €123 million.

Staff canteens have been allowed to remain open. The Finnish government announced on Monday 4 May that restaurants and cafés can partially reopen from 1 June 2020. However, restrictions on things like customer numbers and alcohol serving hours will be in place.

Minister for Employment Tuula Haatainen announced re-hiring subsidy measures during the evening’s press conference. The subsidies will be subject to application. The sum is €1,000 per full-time employee.

“The requirement is for each employee’s pay to total at least €2,500 over a three-month period after the restrictions end.”

That means restaurants do not have to open immediately after the restrictions are relaxed if it is not profitable for them do so. Restaurant businesses with more than 800 employees may not apply. The cost of these re-hiring subsidies is approximately €40 million. Other supports may affect the total re-hiring subsidies received. The re-hiring subsidies are assessed on the basis of the wage information the restaurant has filed with the Incomes Register.

About 3,000 Suomen Yrittäjät members are active businesses in the hospitality and catering sector. Mikael Pentikäinen, President and CEO of Suomen Yrittäjät, is satisfied with the support package for restaurants.

“It’s good that measures are being taken to support restaurants, as parliament demanded. It’s sorely needed by many business owners in the field.”

Compensation to restaurants for restrictions on business

The second part of the package, which parliament also required as compensation for the damage caused by restrictions, will only be paid to restaurants whose April 2020 sales were smaller than the average sales in January–February. The support is equal to no more than 15% of a restaurant’s drop in sales, and no more than €500,000.

This compensation is not paid to large companies with average sales of over €1 million in January–February. The amount of compensation a restaurant gets depends on how much sales have decreased. This compensation is for fixed overheads, not material, wages or investments, for example.

“The compensation is calculated for the period restaurants’ business was restricted, 4 April–31 May,” Minister Haatainen says.

This compensation will cost the Finnish state around €83 million for a total of two months.

Restaurant owners must apply for this compensation. The ELY Centres and the KEHA Centre, which is the TE services’ development and administration centre, will pay the compensation.

“Actual payouts will start a couple of weeks after the text of the bill has been finalized,” Antti Neimala, senior director at the Ministry of Employment and the Economy, said at the press conference.

Pentikäinen says the planned model feels balanced.

“The model emphasizes support for small businesses, as it should. It also supports employment. It’s worth remembering that there are also lots of business owners in the catering value chain who have stopped operations because of a lack of demand.”

Business owners are now waiting for the promised decision on a crisis subsidy which can be paid to businesses in any sector.

“The government’s restriction decisions have also hit other sectors. It’s clear that different sectors should be treated equally and that the support given to the restaurant sector should indicate the size of a general or crisis subsidy,” Pentikäinen says.

Information now needed on how restaurants will be opened – “no need for many tables”

There is no exact information available on future restrictions on opening hours. If establishments are allowed to stay open after midnight, that will not have a large effect on restaurants.

Sakari Tainio, an entrepreneur and CEO of the restaurant company A&S Ravintolat, says, “The virus isn’t more contagious in the day than at night. I don’t think restaurants like ours are going to be affected, time-wise. We’re more likely to be affected by how many customers we can have on the premises.”

“If we opened all our restaurants at the start of June, we’d lose more money than if we didn’t open all of them. Our clientele consists of three segments: corporate, private and tourists. We can forget about two of these, while the number of private clients is lower than normal. There’ll be no need for many tables.”

Tainio says his company will probably open 4–5 restaurants in Helsinki on reduced hours. The Rovaniemi restaurants have been completely closed because of coronavirus.

Anne and Sakari Tainio’s family business includes the well-known Helsinki restaurants Šašlik and Saari, on the island of Sirpalesaari. The Tainios have been forced to lay off almost all of their staff until further notice. A&S Ravintolat and Nams Oy employ around 120 people.

“This support package will not solve this crisis in any way, but any support is necessary and beneficial. Our sales have dropped 95%.”

Yle reported yesterday that the Southern Finland Regional State Administration Agency is already preparing for a surge in applications after the government’s decision on restaurants. Restaurants may be interested in expanding and applying for permits for outdoor seating to ensure safe distances between customers.

Riikka Koskenranta

riikka.koskenranta(at)yrittajat.fi