{"id":568751,"date":"2026-07-04T15:57:23","date_gmt":"2026-07-04T15:57:23","guid":{"rendered":"https:\/\/www.europesays.com\/ie\/568751\/"},"modified":"2026-07-04T15:57:23","modified_gmt":"2026-07-04T15:57:23","slug":"mcdonalds-to-chapter-one-which-restaurants-passed-the-vat-cut-on-to-customers-the-irish-times","status":"publish","type":"post","link":"https:\/\/www.europesays.com\/ie\/568751\/","title":{"rendered":"McDonald\u2019s to Chapter One: which restaurants passed the VAT cut on to customers? \u2013 The Irish Times"},"content":{"rendered":"

The new tax break for restaurants and cafes isn\u2019t for the common people, Cabinet Ministers Simon Harris<\/a> and Peter Burke<\/a> made clear on Tuesday.<\/p>\n

At one second past midnight on Wednesday, the VAT rate on all food services and catering businesses, as well as hairdressers, fell from 13.5 per cent to 9 per cent<\/a>. But anyone hoping that the changes would lead to cheaper food in Irish restaurants, chippers, pizza parlours and cafes will be disappointed this weekend. <\/p>\n

The tax cut, the culmination of an effective and long-running campaign spearheaded by the Restaurants Association of Ireland<\/a> (RAI), makes no distinction between tiny restaurants in the west struggling to put food on the table and the giants of the global fast food world making big money slinging burgers or slicing pizzas.<\/p>\n

That has caused some disquiet, not least because the tax cut will cost \u20ac232 million this year, rising to \u20ac681 million in its first full year, with its implementation a key reason why there was no money left in the last budget for tax breaks for PAYE workers.<\/p>\n

\u201cMy political objective is really straightforward,\u201d Harris said on the eve of the cut. Smiling and holding a pizza, he said he wanted to \u201cgive small businesses in rural and regional Ireland a break, provide breathing space, reduce the cost base on a permanent basis, and this does that\u201d. <\/p>\n

Burke, meanwhile described the VAT cut as \u201ca viability measure to shore up businesses that have been experiencing extraordinary costs\u201d \u2013 and, in an attempt, perhaps, to throw consumers a bone, he added that by creating a more competitive sector there was the potential for a positive impact on pricing in future.<\/p>\n

Taoiseach Miche\u00e1l Martin said much the same on the way into this week\u2019s Cabinet meeting, telling reporters that profit margins \u201chave been very, very tight in that industry, so it\u2019s a support to the domestic services industry, which I think is important\u201d.<\/p>\n

Important it might well be, but Martin seemed to be singing a slightly different tune in the run-up to last October\u2019s budget, when he said any VAT cut should also benefit consumers. \u201cWe would like to see anything we do, if something was to happen, that it should be reflected in the pricing,\u201d he said way back then.<\/p>\n

So, what of that today? So far at any rate, there\u2019s little sign of the cut being \u201creflected in the pricing\u201d anywhere. <\/p>\n

The Irish Times visited a range of restaurants \u2013 from cheap as chips fast food joints to the finest of fine dining restaurants \u2013 just after the budget and returned this week to see what effect the VAT cut had. <\/p>\n

Last October, a McDonald\u2019s Big Mac was priced at \u20ac6.50 while a McChicken Sandwich was \u20ac6.20, with a plain old hamburger costing \u20ac1.90. This week the humble burger was the same price while the Big Mac and the chicken sandwich were 10 cent more expensive. <\/p>\n

In the post-budget haze a Supermac\u2019s cheeseburger was \u20ac3 and is \u20ac3 today, while a Mighty Mac that had a price of \u20ac6.25 in October had the same price after the VAT cut came in.<\/p>\n

At the opposite end of the dining scale is Chapter One, one of the finest restaurants in the world and a place where people definitely don\u2019t go looking for cheap eats.<\/p>\n

In early October, the four-course dinner menu was priced at \u20ac175 while, on Wednesday, the price listed on the website was \u20ac190. The matching wines which cost \u20ac85 eight months ago had edged up to \u20ac90, while the no-expense-spared tasting dinner menu had gone up from \u20ac215 to \u20ac235. <\/p>\n

\"ChapterChapter One restaurant on Parnell Square, Dublin. <\/p>\n

A two-course dinner in the popular but more modest Chez Max in the shadow of Dublin Castle was \u20ac39.40 on the day after the VAT cut was confirmed and \u20ac40.90 on the day after that VAT tax cut took effect. <\/p>\n

Sole, the Drury Street fish restaurant, had managed to keep prices static with the scallop starter costing \u20ac18.50 before and after the VAT cut kicked in. The mussel starter stayed at \u20ac15, while the seafood tower was priced at \u20ac85 in early October and in early July.<\/p>\n

The Bewley\u2019s menu similarly showed little movement with staples such as the sticky bun staying at \u20ac5 and its cream tea for two costing \u20ac25 on both occasions. <\/p>\n

In the days leading up to the VAT cut, a pepperoni passion pizza in Domino\u2019s cost \u20ac23 \u2013 the same as it cost in the days after the cut took effect \u2013 while a plain cheese pizza was \u20ac16 before and after the VAT was reduced.<\/p>\n

One restaurant did, however, cut its prices in line with the VAT cut. Dax on Pembroke Street cut the price of both its lunch and dinner menus with its two-course lunch menu falling from \u20ac53 to \u20ac50, and the three-course option going from \u20ac68 to \u20ac65. The restaurant\u2019s four-course dinner that cost \u20ac98 fell to \u20ac94. <\/p>\n

The tax cut was understandably welcomed by the hospitality sector, with the head of the RAI Adrian Cummins saying it would provide \u201cstability\u201d and \u201cgreat confidence\u201d to \u201cthose firms finding it difficult, thinking of throwing in the towel\u201d.<\/p>\n

\u201cThe difference between this time and 2011 [when VAT was also reduced] is that the Government has told us there\u2019s no pressure on our industry to pass it on,\u201d he told The Irish Times. \u201cThe Government has said it understands the pressures on our sector and they\u2019ve made the 9 per cent permanent.\u201d<\/p>\n

\"HeadHead of the Restaurants Association of Ireland Adrian Cummins. Photograph: Gareth Chaney\/ Collins Photos <\/p>\n

He suggested that when the announcement was made last October, some restaurants \u201ccould see light at the end of the tunnel. There are businesses that could probably have closed down that didn\u2019t because of that announcement last October.\u201d<\/p>\n

Not everyone was as happy. Barra Roantree, assistant professor of economics at Trinity College Dublin, said it was an expensive and economically illiterate giveaway to a sector which is growing. \u201cWhat\u2019s more,\u201d he said, \u201cit will disproportionately benefit owners of McDonald\u2019s and Michelin-starred restaurants most.\u201d<\/p>\n

It is hard to argue that McDonald\u2019s needs that benefit. <\/p>\n

In 2024, McDonald\u2019s Restaurants of Ireland, which operates no restaurants but generates revenue from just under 100 outlets around the country run by franchisees, saw its pretax profits reach \u20ac42.4 million, up 17 per cent on the previous year. <\/p>\n

The pretax profits of Persian Restaurants, which runs 12 McDonald\u2019s outlets including Ireland\u2019s first one on Dublin\u2019s Grafton Street, stood at \u20ac3.3 million, according to accounts filed in November. Another McDonald\u2019s franchisee, Glenellen, with six McDonald\u2019s outlets, recorded pretax profits of \u20ac1.62 million in 2024.<\/p>\n

Business is booming, too, at Domino\u2019s Pizza, which will also benefit from the tax break. The pizza chain has about 100 Irish stores and its most recent accounts for the UK and Ireland point to \u00a391.2 million (\u20ac106.4 million) in underlying pretax profit.<\/p>\n

[\u00a0Hospitality wins from VAT rate cut but no benefit for consumersOpens in new window<\/a>\u00a0]<\/p>\n

When contacted and asked if it would be passing on the VAT cut to Irish customers, a McDonald\u2019s spokeswoman said the fast food chain had \u201ca long-standing commitment to offering value and affordability to customers across Ireland\u201d, and said \u201cpricing [is] kept under regular review by all franchisees throughout the year\u201d.<\/p>\n

For its part, Domino\u2019s \u2013 which, unlike McDonald\u2019s runs a substantial number of its restaurants directly \u2013 said pricing decisions \u201care made independently by our franchise partners, who take into account a range of factors when setting prices for their local stores\u201d.<\/p>\n

\u201cIt is a completely untargeted measure,\u201d Social Democrats finance spokesman Cian O\u2019Callaghan said. \u201cIt\u2019s very expensive and I think there\u2019s better ways to support cafes and restaurants and smaller businesses including one-off grants for the installation of solar panels that would benefit the environment and permanently reduce their energy bills. That is a one-off spend that you get a permanent cost reduction from.\u201d <\/p>\n

Pointing to the pre-budget comments from the Taoiseach about the cut being reflected in prices, O\u2019Callaghan says Martin is \u201cnot just a commentator here. This is going to cost almost \u20ac700 million next year and if he\u2019s not clear on what we\u2019re getting for that \u20ac700 million, that\u2019s serious.\u201d <\/p>\n

Ged Nash of Labour described it as an \u201cunjustifiable, very large transfer of wealth, effectively from PAYE workers to one sector\u201d.<\/p>\n

He said he supports \u201csmall independent coffee shops and restaurants finding the trading environment very difficult because of high energy costs, because of the high cost of doing business in Ireland more generally\u201d.<\/p>\n

However, he said it would have been better to introduce \u201ca targeted scheme to address those energy costs and to reform, for example, commercial rates\u201d.<\/p>\n

There are, he pointed out, \u201ca finite amount of resources in this country, despite what we\u2019re being told, and governments need to be responsible with the public finances\u201d.<\/p>\n

He said one reason why PAYE workers \u201care finding it so difficult to absorb the additional costs that households are experiencing\u201d is because the resources that were available for tax cuts \u201cwent to one sector\u201d and the arguments from Peter Burke and others justifying the intervention are \u201cextremely thin\u201d.<\/p>\n","protected":false},"excerpt":{"rendered":"The new tax break for restaurants and cafes isn\u2019t for the common people, Cabinet Ministers Simon Harris and…\n","protected":false},"author":2,"featured_media":568752,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":"","_share_on_mastodon":"0"},"categories":[73],"tags":[38420,114729,79,160935,2190,18,66264,19,17,10586,5765,4772,14563,44,47089,63,24727],"class_list":["post-568751","post","type-post","status-publish","format-standard","has-post-thumbnail","category-business","tag-barra-roantree","tag-bewley-s","tag-business","tag-cian-ocallaghan","tag-cost-of-living","tag-eire","tag-ged-nash","tag-ie","tag-ireland","tag-mcdonalds","tag-micheal-martin","tag-peter-burke","tag-restaurant-association-of-ireland","tag-simon-harris","tag-supermacs","tag-trinity-college-dublin-tcd","tag-vat"],"share_on_mastodon":{"url":"https:\/\/pubeurope.com\/@ie\/116862533573482918","error":""},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/posts\/568751","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/comments?post=568751"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/posts\/568751\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/media\/568752"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/media?parent=568751"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/categories?post=568751"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/tags?post=568751"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}