The government is being urged to “take decisive action and force landlords to slash rent” during the Covid crisis following the announcement that iconic café Bewley’s is to close.
Adrian Cummins, CEO of the Restaurants Association of Ireland, said landlords “need to take some pain” if the hospitality industry is to survive.
“You are going to have a domino fall of businesses that can’t pay their rent, that won’t be able to open and I can’t see 90pc of restaurants opening up on June 29 unless drastic action is taken,” he said.
“This has to be a wake up call to the government that if a company in hospitality like Bewley’s can fall, what is going to happen in the future for smaller businesses who are having huge difficulty with landlords with no light at the end of the tunnel.
“Landlords are issuing 21 day notices and putting severe pressure on highly stressed businesses and landlords are pushing for rent to be paid when businesses can’t afford it.”
His comments come as a fresh dispute is unfolding between the owners of Bewley’s and its landlord RGRE Grafton Limited, a company controlled by property developer Johnny Ronan.
Bewley’s, which pays annual rent of €1.5m to RGRE Grafton Limited, cited a combination of factors for the closure including high rents and operating costs, coupled with the loss of footfall during the current Covid-19 lockdown.
A source close to Johnny Ronan accused Bewley’s of seeking to “put blame on the landlord”.
The source said Bewley’s asked for a six-month rent holiday at the end of March and RGRE was not in a position to grant this as the company has an obligation to its own stakeholders.
“Every business is dealing with its own issues… the crisis threatens landlords and tenants and both sides have obligations.
“Landlords, like their tenants, come in all shapes and sizes as do their financial structures and balance sheets,” the source added.
Bewley’s took legal action in 2012 to reduce the rent for the premises to €728,000, as recommended by an independent arbitrator.
However, the proposal was rejected by the Ronan Group, which went on to win a Supreme Court action overturning the earlier High Court ruling.
Bewley’s had annual sales of €4.5m last year and recorded losses of around €1.5m.
The café is currently owned by artist Paddy Campbell, and is a protected structure and a landmark for generations of Dubliners and visitors to the capital alike.
In a statement, RGRE Group said it was “not in a position to subsidise its business when its shareholders are perfectly capable of doing so.”
“Bewley’s is a successful and profitable company and has generated significant earnings for its shareholders over a period of many years.
“We call on the Campbell family to enter into meaningful dialogue with Ronan Group to see if this unfortunate outcome can be avoided.”