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One of the UK’s most prominent pub chain chiefs has issued a rallying cry to the hospitality industry, saying a tax disparity is the biggest threat to its success.
JD Wetherspoon’s chairman, Tim Martin, has long-complained about supermarkets’ treatment when it comes to the payment of Value Added Tax (VAT), saying it gives them an unfair advantage – particularly at a time when the hospitality sector is struggling to recover from the COVID pandemic because of the cost of living crisis.
“Supermarkets pay zero VAT in respect of food sales, whereas pubs and restaurants pay 20%. This tax benefit allows supermarkets to subsidise the selling price of beer”, he wrote.
“We estimate that supermarkets have taken about half of the pub industry’s beer volumes since Wetherspoon started trading in 1979, a process that has likely accelerated following the pandemic.”
He complained: “Pub industry directors have, in general, failed to campaign for tax equality, which is an important principle of taxation.
“Unless the industry campaigns strongly for equality, it will inevitably shrink relative to supermarkets, which will not help high streets, tourism, the economy overall, or the ancient institution of the pub.”
He made his remarks against a backdrop of strong trading for major supermarket chains, which benefited hugely from lockdowns and other pandemic restrictions as pubs and restaurants were forced to shut their doors.
Trading updates since Christmas have largely shown continued sales growth as shoppers eat and drink more at home because of the squeeze on their finances from energy-led inflation.
Mr Martin’s plea was contained in an update to the market on the value-focused chain’s performance.
He said he was “cautiously optimistic” about the current financial year despite its sales for the 25 weeks to 22 January…
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