Restaurants are facing bankruptcy due to high electricity prices

The shock rise in electricity and fuel prices has led to bankruptcies of hoteliers and restaurateurs across the country. To support business, the Bulgarian Development Bank provides BGN 60 million in the form of loans with preferential terms.

Due to the severe economic crisis, Mihail Nikolov closed three of his restaurants in Varna. He says his electricity bills have tripled and revenues have fallen sharply as there are almost no customers.

"We do not live from our business at the moment, we live from savings. We do not make money with our business. In the past 2 years we have been living from loans and savings," he said.

Many other restaurateurs are in a similar situation. Many of them closed their establishments in early January.

"Some closed in order to wait for better times, and others - forever. Unprecedentedly difficult situation. The government did not take into account the proposal of employers' organisations - for a threshold of electricity prices, above which the state to help with 75% of the price," said Marin Sotirov, Deputy Chairman of the Association of Restaurants in Bulgaria.

The business support measure approved by the Ministry of Tourism provides for lending to small and medium-sized companies in the sector, which are in difficult position. However, some restaurant owners are not convinced that the new programme will help them survive.

"This is a standard loan. With collateral, with interest, really slightly better interest rates, with a small grace period. But this is another non-working product of a desirable nature," said Mikhail Nikolov.

In order not to go bankrupt, the owners of restaurants are forced to raise prices. They say that the most difficult thing is to find the balance between the real price of the product and the amount that the customer is willing to pay.

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