Restaurateurs blame the French tax system for industry's malaise
European Union employment laws and French taxation came under fire during a discussion on the future of French gastronomy at Raymond Blanc's American Food Revolution conference, held at Le Manoir aux Quat'Saisons earlier this month.
A panel of industry experts from France, the UK and the USA blamed a combination of the 35-hour week, VAT and French social security contributions for the high closure rate of French restaurants.
Among those taking part was Sir Terence Conran, whose company, Conran Holdings, owns 31 restaurants across the UK, Europe and America, including two in Paris. He said: "The present system in France encourages restaurateurs to be fraudulent in order to survive." His own restaurants, he added, operated under French law.
He continued: "I have an extremely successful restaurant in France but cannot make money out of it."
Conran estimated that the tax burden on his French restaurants amounted to at least 45% of turnover.
Restaurateur Bernard Leroy, who owns Le Vin et l'Assiette in Besan‡on, eastern France, confirmed that tax burdens were heavy. He estimated that he was operating at a profit margin of 54% when he needed to run at 60% to break even. He said he was paying about g800 (£531) a month in social security contributions for his chef on top of the chef's salary of g1,200 (£796) per month. He said: "We tried with two chefs but it was not viable. We couldn't afford it."
Jaques Pourcel, who owns and runs the three-Michelin-starred Le Jardin des Sens in Montpelier with his brother, Laurent, agreed that it was hard to make money out of gastronomy in France, even at the haute cuisine level, where menu prices were famously high. He said: "Over the past four to five years our margins have been going down. We're happy when we break even."
He added that he and his brother also owned brasseries and that they brought in more money than the restaurants, partly because of lower staffing levels, which helped increase margins.
French VAT currently amounts to 19.6%, but the French government is looking at reducing it by 5.5% by 2006, confirmed Andre Daguin, president of France's Union des Métiers de l'Industrie Hôtelière.
