Wednesday, December 11, 2019

Head of Puerto Rico Restaurants Association: Consumers were expecting economic relief

By on October 2, 2019

A credit card reader (Screen capture of www.fortaleza.pr.gov)

However, says price increases, such as when sales tax was lowered, cannot be controlled

SAN JUAN — The president of the Puerto Rico Restaurants Association (Asore by its Spanish acronym), José A. Salvatella, said Wednesday
that it is impossible to stop restaurants from raising the price of some menu items, as happened Tuesday when the sales and use tax (IVU by its Spanish acronym) reduction on prepared food took effect.

“We can’t control that. They are within their rights. It is a management decision that every business is making and is part of the freedom to do business in Puerto Rico. As an association, we do not recommend that action,” Salvatella said in a radio interview (NotiUno).

He said the market regulates itself and there is no entity that can control prices.

After the IVU cut on prepared food took effect Tuesday, dropping to 7% from 11.5%, people began sharing their restaurant receipts on social media, revealing that the price of certain meals was the same or higher than before as restaurants increased the price of items, thus the tax reduction did not reflect any savings.

“Every consumer must be aware. I would say that those businesses that raised prices—in an informal survey we did—are very few. For the most part, the restaurant industry sufficiently competitive that it is difficult to be able to increase prices at the moment…. It is the minority. The majority of restaurants left the menu intact,” Salvatella said.

He urged those businesses that raised their prices to reevaluate the decision.

“I do not think it is appropriate to raise prices at this time when our consumers expected economic relief,” he concluded.

To address the concern on social media on Tuesday, Lizmarie Medina, the chief marketing officer of the Colón Gerena Group, stressed that neither Wendy’s nor any of the restaurants belonging to the group–Applebee’s, Longhorn, Sizzler, Olive Garden and Red Lobster—have raised prices.

“The measure of lowering the tax to 7% was appropriate and favorable for consumers. Wendy’s, because of that, has implemented it without imposing an increase on any of its products. Increasing prices would go against the measure itself; its reason is to help consumers when purchasing their meals in their daily lives,” the executive said.

—Cybernews contributed to this report.

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