Saving the serving sector: Europe’s cultural heart needs protecting during lockdown

DISCLAIMER: All opinions in this column reflect the views of the author(s), not of EURACTIV.COM Ltd.

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The extraordinary measures being taken to restrict the spread of the COVID-19 coronavirus, such as shutting down bars, restaurants and festivals to prevent social gatherings, have been keenly felt by the whole hospitality sector and its suppliers.

The emptiness of pavements, terraces and pub gardens as spring glides in across Europe is a stark reminder of the strength, action and solidarity required from all parts of society to combat this crisis.

Many people have come up with creative ways to support, as best they can, their favourite brewer or local spot, whilst maintaining physical distancing principles. From restaurant and craft beer home delivery to hosting virtual parties with friends and family online.

But as the latest figures from the beer sector have shown, the value-added to the European economy from a beer sold on-trade in those places is nearly five times that of the off-trade or retail. Specifically, €24.2 billion compared to €5 billion in 2018.

Not to mention 73% of the 2.3 million jobs created by beer in Europe as a whole are to be found in the hospitality sector.

Despite good intentions, not all of these can be supported by home deliveries and beer vouchers – the latest scheme set up by brewers and pubs to provide some cash flow to shut-down bars and allow people to pay now for beers that they will consume only once the lockdown is over.

For centuries, these unique hubs for social gatherings have helped shape local communities, culture and the way of life across the continent – without fast, effective intervention, many of these businesses will disappear altogether from the European map, dramatically and irreversibly changing society forever.

It may sound dramatic, but this is the reality many are facing and is more acutely felt the longer the crisis continues. This is why those that work and represent these places, like myself, are fully in support of shutdowns.

If it brings about a quicker end to the spread of the virus and protects people’s health – especially the most vulnerable – things can return to some semblance of normality as soon as possible.

In the meantime, governments taking the appropriate exceptional measures can help minimise as much as possible the impact on Europe’s two million hospitality establishments but also the other sectors, such as brewing, that depend on them.

So how can national and European policymakers keep the hospitality sector front-of-mind when considering and proposing actions to soften the negative economic and personal effects during this time?

They need to match the smaller efforts of individual consumers committed to staying at home with several key supportive measures for the hospitality sector, its value chains and all the people working throughout the sector.

Member states have each laid out their responses as the situation has evolved, but there needs to be strong collective action from Eurogroup finance ministers meeting on 7th April, as well as each of the European Union institutions.

Firstly, national fiscal policies should include short term refunding of tax and social charge payments already made, postponement of new payments, and targeted reductions in VAT and excise over the medium term, to boost recovery and job creation.

If not already in place, there should also be minimum salary compensation by governments for employees facing technical unemployment – as seen in most countries.

At a European level, grants and loans, including through the redirection of structural funds, should put the hospitality sector at the core of the new ECB economic stimulus program, plus exceptional state aid measures to compensate for lost earnings.

Giving firepower to The Coronavirus Response Investment Initiative by granting liquidity loans with minimal bureaucratic hurdles at zero interest rate will aid companies to avoid collapsing. There ought to be flexible repayment terms to allow those companies to rebuild balance sheets before repayments.

With some or all of those measures in place, it will then be key that as we begin to move towards considering the lifting of restrictions, businesses are best placed to bounce back to life.

Thinking just about where beer is served, it might not be as simple as rolling up the shutters and putting tables back out – there will be staff to re-engage, unused stock to sort out, barrels and bottles to be emptied and returned, fresh beer to brew and deliver, lines to clear and clean.

There needs to be continued support through the emergency measures that are recommended for the hospitality sectors, including a well-thought-out exit strategy to enable those that are able to open shop, to do so in a practical manner.

At the end of the day, we are all standing shoulder-to-shoulder with the frontline health staff and those people who have been affected by this deadly disease.

Brewers are doing what they can, together with various sectors within leisure, food and drink to support the fight against the virus and ensure that the crisis does not go on longer than is necessary – and we can continue to do so with the right support of our national governments and European institutions.

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