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The State's competition watchdog has opened a formal inquiry into the RAI (Irish Restaurant Association) about a campaign to encourage the charging of non-refundable deposits to absent customers.
The Commission for Competition and Consumer Protection (CCPC) has convened this week high-level representatives of the occupational group, after the opening of an official record on November 1.
The issue of no-shows – people who make reservations but do not show up, leaving restaurateurs out of their pockets with unsold tables – has come back to the forefront as it enters the Christmas period.
The RAI raised the issue during media interviews in January, after many members complained of the growing number of defections at Christmas last year depriving them of income for a crucial period.
Adrian Cummins, CEO of RAI, suggested in an interview on the radio that restaurants were accepting deposits at the time of booking and charging fees to customers who did not show. He suggested that 20 euros could be "right".
Examples of policies
RAI also distributed a sample of policies to the members and interviewed restaurants about the policies in effect. Many restaurants already apply such a policy, especially in high-demand urban restaurants, but the trade is not uniform.
The CCPC contacted the badociation for the first time earlier this year, expressing concern. She does not see any objection to individual restaurants deciding to charge a no-show fee, but she told RAI that any attempt by a commercial organization to coordinate of the entire sector would be contrary to competition law.
RAI denied any wrongdoing and said that it simply pointed to a problem that was of concern to its members, many of whom were small businesses. The CCPC has asked it to take a number of steps, including RAI staff being trained in competition and reporting regularly to competition regulators.
Deteriorated
However, relations between the parties deteriorated and the CCPC opened its formal court case against RAI this month. RAI confirmed that notices had been served, but indicated that it was advised not to comment further.
The CCPC stated that RAI had "failed so far" to address its concerns. She confirmed the opening of a formal investigation: "In competition law, a professional badociation must not attempt to coordinate the behavior of its members, for example by advising, recommending or suggesting … conditions in which service should be provided or the price that should be charged. "
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