Looming VAT hike bodes ill for the Wiener schnitzel

Somebody warn Julie Andrews: soon the Wiener schnitzel may no longer be one of her favourite things.

Even 60 years on, it is easy to see why the singing Sound of Music novice, nanny and guitar-wielding wife loved the tasty schnitzel: a slice of veal, hammered flat, breaded and gently fried in oil.

Sworn to poverty, though, not many nuns could afford to pay €30 for their favourite dish. But that is what’s looming for millions of diners across German-speaking Europe.

Cost pressures – food, staff, energy and rent – have already seen restaurant owners charge record prices in the last two years. And now, despite a 13 per cent drop in Germany’s adjusted inflation rate, the schnitzel with a side dish is heading towards that €30 mark.

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“The situation remains extremely challenging,” says Guido Zöllick head of the Dehoga lobby group for German hotel and restaurant owners.

His schnitzel alert is part of a wider warning that more than 12,000 pubs and restaurants could close unless they are allowed to retain a reduced VAT rate on restaurant food introduced during the Covid-19 pandemic and extended during last year’s energy crisis.

A jump from seven back to 19 per cent will discourage people from dining out and leave many in the trade, they fear, sitting on a schnitzel mountain.

[ German business confidence shaken as economy fails to grow ]

After forced closures of 36,000 restaurants and bars in the pandemic, Dehoga says trade has not yet returned to pre-Covid levels. Many have no reserves left to absorb even part of the 12-point tax rise.

“The tax cut is what kept many going in the pandemic but we will have to pass it on in full, there is no other way,” said Thierry Willems of the Weihenstephan restaurant in Freising, in Bavaria. “As a result, turnover in the gastronomy sector will drop.”

Already fears of an upcoming price rise has seen a surge in online do-it-yourself schnitzel tips for brave home chefs.

Some spray the flattened meat with cold water, others swear by wrapping and chilling the breaded meat. One horrific suggestion encouraged schnitzel lovers to add cream to the beaten egg mix.

We don’t know how Maria liked her Sound of Music schnitzel, nor if Captain von Trapp was brave enough to fry schnitzel for his seven unruly children.

But as in neighbouring Germany, Austrian restaurants face the same VAT hike next year from seven to 19 per cent.

Salzburg’s Herzl restaurant, the last stop on the Sound of Music tour, serves “Schnitzel with noodles” seven days a week.

As the Friday lunchtime rush passed, one staffer admitted: “Of course we are feeling the price pressure.”

To the list of their unfavourite things – dog bites and bee stings – add VAT hikes.