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Rude Drink by Vir Sanghvi: The bar code



It is no longer big news to say that the restaurant industry is gripped by a crisis so severe that many restaurants may not last much longer. Lakhs of people will be out of jobs, restaurant owners will go bust and an important aspect of the social lives of our cities will vanish, possibly forever. There are different estimates of how many restaurants will close, ranging from 40 per cent to a high of 70 per cent.

What you may not know, however, is that this carnage is avoidable; at least in part. Covid has had terrible consequences for the restaurant industry in many countries of the world. But in several of them, governments have stepped in to try and minimise the damage.

In the US, Donald Trump tweeted as soon as the crisis began that the government would look after the industry and, by and large, the US F&B industry has been shielded from the worst economic effects of the pandemic.  For restaurants and bars like Diablo, the owners are pushing for outdoor dining with rooftops included For restaurants and bars like Diablo, the owners are pushing for outdoor dining with rooftops included

All over Europe, governments have stepped in to help by contributing towards salaries and offering tax breaks.

In the UK, Chancellor Rishi Sunak has added to the existing slew of restaurant-friendly measures by slashing VAT rates on restaurant meals and by encouraging people to eat out. (The most common sentiment you hear among Indian restaurateurs these days is: “Yaar, why couldn’t Rishi just be our Finance Minister? Why is it that an Indian can do so much good in the UK while here, in India, we continue to suffer?”)

We are now in the extraordinary situation of being the only major economy in the world where the government has pretended that the restaurant sector does not exist. Even Thailand has done more for its restaurants than India has.

There is a second thing that you might not immediately realise. As badly off as restaurants are, there is one segment that is even worse hit: the bar sector.

In such countries as the UK and the US, governments tend to treat restaurants and bars roughly on par. Nobody disputes that there are important differences. On the whole, you sit at tables when you eat at restaurants, which makes it easy to ensure social distancing. On the other hand, when people stand near a bar counter, it can be more difficult to check that social distancing norms are being enforced.

But equally, nobody also disputes that, with a little effort, it is possible to make sure that bars are relatively safe too. In the UK, when restaurants were allowed to re-open, bars and pubs were included in the same category.

In India, of course, the bureaucratic-political mindset is that places where liquor is served are dens of evil (which is why politicians can only drink themselves silly at home), so the rules are skewered to harm them the most. When restaurants were allowed to re-open, bars were specifically excluded. You could argue that this made some sense. But how about this: if you went to a restaurant, sat at a table and observed social distancing, you were still not allowed to drink alcohol.

It is one thing to not help an industry, quite another to be stupid and illogical.

Out of sheer exasperation, our bars have stopped expecting any money and soft loans from the government. All they want is an input tax credit on GST and longer hours of operation. But even that has been denied.

I spoke to Priyank Sukhija, the restaurant and bar king of Delhi and his suggestions were modest in scope.

In London and in many European cities, they have closed off streets to create new pedestrian and eating-and-drinking areas. In India, there is no uniform policy even on using outdoor areas. As Priyank says: “Outdoors is safer than indoors but the NDMC does not have a policy for outdoor or rooftop dining. Cities all over the world are giving public land. We should at least be allowed to use our own outdoor areas.”

Faced with governments and municipal corporations that don’t even offer policy support (let alone financial support), the bar business has tried to look for support from those it regularly deals with. The liquor companies are one obvious source of support. Rahul Singh, past president of the National Restaurants Association of India (NRAI) and owner of The Beer Café, went to all of the liquor companies to see if they could help.

He came back with a commitment of Rs 1.4 crore from Pernod Ricard and Rs 1 crore from Beam Suntory. The NRAI used this money to give actual cash benefits to bartenders and bar workers who had been hit by the lockdown. Anurag Katriar, the current president of NRAI, told me, “We have collected data of bartenders and other bar workers from our member-restaurants and have so far transferred about Rs 5,000 each in the accounts of 3,300 people, totalling to ~1.65 crore so far. More will follow as more money comes in.”

Rahul Singh agrees that this is not much, but says that at this time of crisis any cash helps income-less bar workers. He is especially grateful, he says, to Vijay Shekhar Sharma of Paytm who made sure the money reached the workers, many of whom had gone back to their villages.

The big boy on the block is, of course, Diageo, maker of Johnnie Walker and other iconic brands that have a resonance in the Indian market. Rather than just give cash to other organisations, Diageo has instituted a global $100-million fund called Raising the Bar to help bars prepare for the new normal and to take care of the many additional expenses bars will face in the months ahead.

Of that $ 100 million, $10 million (around ~75 crore) has currently been earmarked for Indian bar outlets. Because this is a global initiative (and bars have re-opened in much of the world), it draws on the experiences of other countries to prepare bars for re-opening and for surviving in a post-lockdown world, where the pandemic still remains a key factor influencing behaviour.

I hadn’t realised this myself but cash-strapped bars will now have to make new investments in hygiene and social distancing. Diageo reckons they will need sanitisers and dispersers, Perspex screens to separate guests, thermal temperature scanners, new reservation systems, and contactless menus and drinks lists. Diageo will pay for much of this.

All of this is not easy for everyone to do, so there will be special training in how to run hygienic bars, how to keep the bartender-customer relationship alive while applying social distancing measures, how to make the bar seem warm and welcoming while discouraging crowding near the counter, and how to reassure guests that bars and kitchens are safe.

At present, the bar industry, focussed as it is on mere survival, has not even wondered about what the future will be like.

But if you stop and think about it, there’s no doubt that it can’t be business as usual again. In India, more than any Western country, people still seem scared of going out to restaurants (and presumably, to bars when they do open). There is even a widespread resistance all over India to the idea of ordering food in on grounds of safety. (Delivery sales are still only about 30 per cent of what they were before the lockdown.)

How will bar owners lure customers back to their establishments? How will they get them to order bar snacks? The Raising the Bar initiative reminds us that it may be more difficult than they realise. Most restaurants that have opened during this partial unlockdown are making only 25 per cent of what they used to earn. The owner of The Beer Café approached all liquor companies to seek their cooperation

The key to success lies in making customers feel that a) that there is no health risk because the bar follows the best hygiene protocols and b) that bars still have so much to offer in terms of ambience and atmosphere that they are worth going to even if you have to spend more than you would if you simply drank at home. (The liquor companies make money even if customers drink their products at home, so the commitment to spend large sums of money to help bars is a largely altruistic act.)

The Raising the Bar initiative aims to train bar staff to cope with both factors. Rahul Singh of The Beer Café concedes that it will not be easy for bars to restart because the new normal entails new expenses. But he remains an optimist. He gives the example of New Orleans, which was devastated by Hurricane Katrina. Of the city’s 985 restaurants and bars, nearly all were destroyed. But New Orleans bounced back. There are now 1,300 outlets, more than there ever were.

So, bar owners just have to survive this phase and next year could be much better. All they need to do is, to focus on Raising the Bar!

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