Restaurants’ plan to charge for ‘no-shows’ blocked

The State’s competition watchdog has clamped down on a restaurant industry campaign to levy a deposit charge on customers who book tables and then fail to show up.

The Restaurants Association of Ireland (RAI) has said up to a fifth of bookings made in the run-up to Christmas last year were “no shows”, resulting in heavy losses for establishments left with unsold tables.

In the run-up to Christmas, and immediately afterwards, the RAI co-ordinated a campaign encouraging restaurants to introduce policies on booking deposits, to be forfeited if the customer failed to show.

It distributed sample booking policies to members and sought to establish the average deposits currently in place. In a radio interview, RAI chief executive Adrian Cummins suggested €20 may be a fair charge.

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However, the campaign caught the attention of the Competition and Consumer Protection Commission (CCPC). Earlier this year, it contacted the RAI expressing concern and launched an investigation.

Warning

"Competition law requires that businesses act independently and trade associations must not attempt to co-ordinate the actions of their members," the CCPC told The Irish Times.

While individual restaurants will still be allowed to charge deposits, the commission said: “This means the RAI must not influence or attempt to co-ordinate the pricing decisions of its members or decisions on the terms under which [restaurants] provide services.”

The RAI confirmed last night it had been engaged with the commission, but expressed anger that the watchdog was “actively targeting small business organisations” instead of going after “anti-competitive sheltered professions”.

Denying the RAI had tried to fix deposit charges, Mr Cummins said: “We stand over our position with regards to highlighting the issue of no-shows within the Irish restaurant sector.”

Responsibilities

He said he would write to an Oireachtas business committee asking it “to call before it the CCPC to justify the man hours spent in targeting the RAI for a common-sense issue.”

He claimed the commission has “lost the run of itself”. The competition regulator responded that it “takes its responsibilities very seriously”.

It is understood the commission has made several demands, including that the RAI not attempt to influence booking policies. It also wants RAI staff to undergo competition training and for it to regularly report to the watchdog on its procedures.