Challenging times for Brisbane's fine dining scene

The Brisbane dining scene was rocked his week with the shock news that two of the city's best restaurants, Philip Johnson's Bistro One Eleven in the CBD and Simon Hill's Ortiga in Fortitude Valley, were to close.

Both Hill and Johnson are considered to be the most experienced operators in the business, racking up more than half a century between them.

So what went wrong? Does fine dining have a future in the city?

As far as Hill is concerned, Brisbane is in the midst of "the perfect storm".

“We've got penalty rates, a skills shortage, rising costs and the disappearance of the big spending diner. When we started Ortiga, it was perfectly viable. Now it's not. The world is changing around us, that's life.”

Hill also reckons Brisbane simply has too many restaurants.

In the end we will go back to where we started - with fine dining available only in hotels, because they are the only ones who can afford it, because they can offset the cost with their rooms.

It's a statement that would seem to be supported by reports of seas of empty tables in some of Brisbane's upper-end restaurants, particularly at lunch time.

In a statement released on Wednesday, Johnson, who opened Bistro One Eleven just a year ago in the heart of the city's business district, cited lack of diner numbers as an issue. “Unfortunately we never achieved the numbers we needed to make it work,” he said.

David Pugh, owner of Restaurant Two which is also in the city, has been in the industry for more than two decades and agrees with Hill's assessment that there are too many restaurants.

“We are cutting the pie a lot thinner," he said.

"There are too many new places for our population. With each five that open, another five will close.”

Over the past few years, new restaurant precincts have sprung up in South Bank, Woolloongabba, Petrie Barracks and most recently the Gasworks development in Newstead, with more developments slated for Fortitude Valley, South Brisbane and Hamilton, among others.

According to Pugh, the recent explosion of new venues means the higher-end restaurants in the CBD are feeling the pinch.

“Yes, there's money in the city still, but its harder to pull it out and our rents are very high in Brisbane. We are fortunate that we do lots of weddings and functions, because we couldn't survive on a la carte alone.”

Owner of Aria Brisbane Matt Moran says the waterside restaurant “was doing alright, but could be busier”.

“We're luckier than most though, we have a great view and we have the private room for functions,” he said.

According to Moran, while numbers in his other businesses "increased every year" Aria Brisbane doesn't.

He said he was shocked at the closure of Ortiga, which launched in 2010 after successfully operating as Isis for 13 years.

“It's a great loss to Brisbane and to Australia,” Moran said. “Yes, Ortiga are my competition but you need competition to thrive. I've watched the food scene change in Brisbane. With the introduction of The Good Food Guide and world-class chefs, like Pablo, Brisbane people no longer consider it second rate to Sydney or Melbourne, but we have to continue to support the restaurants or they won't be there.”

The introduction of penalty rates in 2009 has also had a detrimental effect on already slim profit margins, the industry say. According to one Brisbane restaurateur who didn't want to be named, penalty rates meant that kitchen hands were being paid up to $50,000.

According to Pugh, it is now unprofitable for him to open Restaurant Two on public holidays.

“In the end we will go back to where we started - with fine dining available only in hotels, because they are the only ones who can afford it, because they can offset the cost with their rooms,” Pugh said.

On Thursday the Fair Work Commission rejected an application by the country's restaurants and cafe owners to cut weekend penalty rates. The Restaurant and Catering Industry proposed the scrapping of penalty rates for weekends or between the hours of 10pm and 7am on weekdays, with penalty payments awarded only when employees worked six or seven day shifts.

The rejection of the proposal spells bad news for restaurateurs, according to Restaurant and Catering chief executive John Hart.

“What we saw in Brisbane this week will continue," he said.

"If we have to wait until the next review to do something, we can expect between 5000-6000 businesses to close Australia-wide. Ortiga have said that the cost of labour was a significant factor forcing them to close and this is a systemic problem in the industry. We are not crying wolf. This is not going to go away and will get worse before it gets better.”