In the Czech Republic, restaurants see school cafeterias as unwanted competition

School cafeterias in the Czech Republic can sell meals to customers other than pupils and school staff. But restaurants find the competition unfair, considering schools’ public subsidies and low prices.

School cafeteria in Czech Republic
A school cafeteria in Krhanice, Czech Republic | © Association of School Cafeterias of the Czech Republic

On an average day at school during March in Hodonín, an eastern Czech city of 25-000 people next to Slovakia’s border, about 60 adults come to the cafeteria to pay and pick up their order for lunch. In another one in Brno, 250 meals for adults are available for sale, Czech news media Deník reports. Some schools even offer delivery services.

But these customers can’t eat in and must bring a box to take their lunch because they are not part of the school staff, even less so students.

Most customers of the school cafeterias are pensioners, single mothers or benefit from local social programs.

But for some restaurants, this school offering accounts for “unfair competition.” Private businesses have been struggling with the COVID-19 pandemic and now inflation while schools benefit from constant public subsidies from the municipality, the region or the State to function and then sell food at unbeatable prices. They also don’t pay for new equipment and real estate tax.

In the Czech Republic, someone can buy a three-course lunch at a school cafeteria for 80 to 90 crowns (3.5-4.1 dollars). In a restaurant in Brno, the second-largest city in the country, a pizza or a burger would cost at least twice as much.

Workers spent 180 crowns ($8.2) on average for lunch in December 2022, according to data gathered by Sodexo Benefity with the Gastro Pass Card, the largest electronic meal voucher system for employees in the country. The most expensive lunches are in Prague: People paid 204 crowns ($9.3) on average. The national average cost of a lunch grew by 19 percent in a year.

In February, the Association of Small and Medium-sized Enterprises and Tradesmen of the Czech Republic (AMSP) denounced that restaurants are “going out of business. In addition to inflation, school cafeterias.” According to the association, almost one in four Czech aged 70 and over benefit from lunch at a discounted price and half of them eat from one of the 8,000 school cafeterias of the Czech Republic.

School cafeterias are not competitors of restaurants

A business owner from a 3,000-people town sent a letter to the association arguing that “they say it’s so that our pensioners can have cheaper lunches. But this is just an alibi because we all pay for it, and more importantly, other citizens and businesses can and do use these services.” He seized the office for the protection of competition (ÚOHS).

But the ÚOHS answered the business owner there was no indication that it could lead to a violation of economic competition with the available information.

School cafeterias argue they don’t run a business but try to compensate for the increase in food prices by selling meals to avoid reducing the budget on other expenses.

Parents typically pay their children’s lunch at school about 50 crowns ($2.3), depending on their age. School staff would pay higher prices, closer than those of external customers.

But cafeterias can only sell to some eligible categories of people as part of social services, and the prices need to cover all costs so as not to use public funds, explained Martin Švanda, spokesperson of the ÚOHS, to Podnikatel. They don’t serve meals for children at the same time and place as for customers. Providing meals for schoolchildren needs to remain their primary purpose.

The ministry of Education in October last year approved schools to increase the prices of their meals by up to 20 percent starting in February to face the rise in food costs. After ten years without one, the upper limit also increased in September 2021.

The inflation rate in the Czech Republic has been higher than 10 percent every month since January 2022, according to the Czech statistical office. Last September, consumer prices grew 18 percent compared to September 2021.

But protests of restaurants against Czech school cafeterias were not born with the recent price spike.

In 2018, the Czech association of hotels and restaurants and the AMSP complained about the unfair competition from school cafeterias, Lidovky reported. At the time, a three-course meal cost less than 70 crowns in a cafeteria and above 100 crowns ($4.6) in a restaurant.

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