Restaurateurs make on average €3 profit on every €100 spent in their premises, an industry body claimed.
Rejecting allegations about "rip-off" pricing, the Restaurants Association of Ireland (RAI) said its members are operating on "pathetic" margins. And, smarting over bad press, it is taking its message directly to customers - by distributing leaflets showing the breakdown of a typical bill.
The RAI said most EU countries benefited from lower VAT rates and, in many cases, no excise duties.
In Spain, for example, VAT on food and drink was 7 per cent lower than in Ireland, and the minimum wage more than 50 per cent lower. In addition, Spanish consumers paid no excise duty on wines, whereas Irish people paid €2.49 for every wine bottle, and €4.98 for every champagne bottle.
Aidan MacManus, owner of the King Sitric fish restaurant in Howth, Dublin and RAI president said: "No one in their right minds would do what we do on a financial basis.
"It's a lifestyle choice. I enjoy what I do. But you would really want to be mad to put in the sort of money we have put in for the returns we have got." He said the cost breakdown at his restaurant was similar to that calculated by the RAI through a confidential survey of its members.
The survey, which has been published in tandem with its Do You Know? consumer leaflet, estimated that €13 from a €100 dinner bill went on VAT, €31 on food and drink, €31 on staff wages, €22 on overheads, and €3 on profit. Mr MacManus said the profit on his €52 four-course dinner menu was a "pathetic" €1.60.
This was based on him spending €18.40 on produce and €26 on overheads and wages for 22 staff - a figure which excluded payment to him and his wife, who together put in "80-90 hours a week".
He said the profit margin would rise marginally if a customer ordered a cheaper starter. But against this "you have to worry about the fluctuation in business, which is massive and getting worse".
Other reasons for a dent in profits are the smoking ban, increased insurance costs, stricter regulations, and a rising minimum wage, he said.
"Every time we get an extra per cent, there just seems to be someone else out there trying to take it away.
"We probably have the lowest direct taxes in the EU, and the lowest corporation taxes - which is great for when we get that far - but the hidden taxes are very high."
He said restaurants like his own, which sourced organic products locally through small suppliers, were now "dinosaurs" in the sector. "We are all going to end up with franchises of Bewley's or Lemongrasses - these types of places which are bursting on to the scene because they are there to make money, and to squeeze the margins."
Where your money goes
Sample four-course dinner menu:
King Sitric fish restaurant, Howth, Smoked Salmon & Asparagus Parcel, Horseradish Hollandaise;
Choice of Soups;
Fillet of Hake, Herb Crust, Tomato Dressing;
Choice of Dessert or Irish Farmhouse Cheeses;
Coffee & Petit Fours.
€52.00 - total bill before tip
Restaurant's calculation:
€18.40 produce
€6.00 VAT
€15.60 wages
€10.40 overheads
€1.60 profit
