Political Factors Affecting a Restaurant

Political factors affecting a restaurant: Government, Taxes, Food policies, Cost of living. If you own a restaurant, you should be aware that the industry does not function in isolation.

Political factors affecting a restaurant: Government, Taxes, Food policies, Cost of living
Political factors affecting a restaurant: Government, Taxes, Food policies, Cost of living

Whatever happens in government can have an impact on businesses, including restaurants and the food industry in general. Some political variables affecting the food business will have an instant effect, while others will have a longer-term impact.

Whatever occurs in politics can have an impact on your restaurant’s client satisfaction, payroll, revenues, and even cuisine.

The restaurant sector as a whole, and some restaurant owners in particular, enjoy keeping tabs on politics to see how incumbents and incoming lawmakers vote. They have trade associations and lobbying groups that advocate for restaurant owners’ objectives, and they pay politicians who will support those interests.

Restaurants, like any other industry, will often support politicians and political candidates that provide them with a platform to discuss issues that affect them and support legislation that help the restaurant industry.

Around the world, a number of governments have already defined the scope and structure of food industry operations. Factors considered in this assessment include labor laws, minimum wage, food transportation regulations, food storage regulations, and kitchen cleanliness.

As a result of these and other regulations, food and beverages are one of the most regulated industries in the world. Regular people who just wish to eat and satisfy their hunger should be protected from harm and have their health care ensured.


Governments use a variety of rules and regulations to impact the restaurant business. Restaurants must adhere to varied tax systems and food requirements depending on where they are located. Health and safety standards in certain countries are very tight and closely monitored, whereas in others, even if the regulations are strict, the monitoring is more permissive.

Restaurants in many developing countries experience higher demand during local and national elections. Political unrest, on the other hand, may cause consumers to cut back on their spending or perhaps quit eating out completely.

Government subsidies are important to restaurants during lean times. The UK government, for example, supported millions of restaurant meals through its “Eat Out to Help Out” campaign in 2020, which was intended to aid the industry’s recovery from the first lockout.

These variables determine how much government policy affects the firm. It could be rules governing health and safety, taxation, trade policy, labour law, environmental law, trade limitations, and so on.

Whether a firm will be successful depends on political stability. In the area where this industry operates, conditions are likely to change over time, affecting government policies. To adapt to these developments, businesses must be adaptable and plan their business plans appropriately.

The restaurant industry is the most affected by health and safety rules. To comply with health and safety regulations, businesses must maintain cleanliness and hygiene when performing cooking, packaging, and delivery operations.

The industry is influenced by taxes that affect the procurement and quality of goods. It varies depending on the country. Companies must manage their budgets carefully to account for this problem.


Taxes, like any other politically charged issue, can have a significant impact on your food business. It could have a direct effect, such as a restaurant tax, or it could have a more indirect effect. For instance, the business lunch tax deduction used to be 100%, which meant that many business people would eat at your restaurant for official meals. Your revenues were bolstered by the patronage.

When the discount was dropped to 50%, patronage presumably decreased as eating out for business meetings became less appealing. This meant that your profits would suffer as a result. Other factors to consider are credit card usage laws, tourism, sales tax, food donations, and so on, all of which may have an impact on your restaurant business in some way.

Food policies 

Food policy is the foundation of our food system. Policymakers’ decisions at all levels, from the federal to the state to the city, can have a significant impact on everything from what crops are farmed to how much food costs. We must have a clear understanding of the rules and regulations that govern our food system, since these are public policies that should serve the public interest.

Legislation (the passing of laws) and regulations (the implementation of those laws) are among the ways in which government actions shape our food system. All levels of government are involved in the formulation and implementation of policy, from international trade agreements that determine the price of food imports and exports to school district wellness rules that determine the types of foods available at bake sales.

All the levels of government and every branch of government have decision-makers responsible for food policy. Our food system is governed by laws interpreted by the judicial branch. Policy focuses on the acts of the legislative and executive branches at all levels of government, including the municipal, state, and federal.

Whether it is a federal senator, a state assembly member, or a city councilor, elected officials can write legislation (laws, acts, statutes and ordinances). A law defines how laws are to be implemented and enforced and gives certain agencies the authority to enforce them.

As an example of a food policy created through the legislative branch, New York State’s Food Recovery and Recycling Act, which requires the state’s major food waste generators to provide nutritious food, was enacted in 2019.

Although the extent of the federal government’s control over our food system appears extensive, there are some significant gaps that state and local governments can fill. Food sold in retail stores and restaurants is subject to a great deal of state and local government regulations since the federal government has limited regulatory authority over interstate commerce.

In addition to those areas that the federal government hasn’t officially addressed, states can also regulate their own activities. Prior to the Affordable Care Act’s passage in 2010, major national chains did not have to label their menus with calories. California was one of the states that passed a law regulating this.

Governments’ activities in food policy are at the forefront of innovation and experimentation. There tend to be more immediate repercussions, challenges, and opportunities when it comes to food at the neighborhood level.

In a variety of circumstances, local policy reforms have served as templates for state and national policy reform. The federal government has now taken local initiatives to new heights, such as calorie labeling on fast food menus, limiting trans fats, and doubling the value of SNAP benefits at farmers’ markets (“double up food bucks”).

You should remember that the federal government does not – and should not – make critical decisions about our food system on its own. In the process of making laws and rules (regulations), the public has the opportunity to provide input.

These processes are often dominated by well-funded industrial groups, but advocates and activists from a variety of sectors — including public health, environmental health, immigration, labor, animal welfare, and more — are increasingly pushing back against them.

Cost of living

In general, the cost of living is the average price of all essentials such as food, accommodation, utilities, transportation, clothing, and health maintenance. Using the cost of living as an example, one can state how much money one would need to live in a given city at a minimum standard of living.

Housing, food, transportation, child care, health care, and other essentials are included in the Economic Policy Institute’s definition of basic living expenses. The cost-of-living expenditures can differ from person to person because of factors such as lifestyle and family size.

How does an increase in the cost of living affect you? The cost of living rises periodically as a result of inflation. The cost of everyday commodities such as food, housing, petrol, clothing, and utilities keeps rising. This means that your employees spend more. To maintain a stable financial status, compensation for employees should rise in tandem with rising living expenses.

Read also: Political factors affecting a restaurant

Colors in restaurants; OSHA Regulations for Restaurants; PEST analysis of a restaurant; Restaurant Policies

External resources: Bizzfluent

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