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JD Wetherspoon has reiterated calls for the government to eliminate the tax gap between pubs and supermarkets, claiming the government’s budget has exacerbated existing inequalities.
Wetherspoons boss Tim Martin said the rise in minimum wage, business rates, and national insurance in last year’s budget will cost the pub chain an extra £60m per year.
This will have a “significantly bigger” impact on pubs than supermarkets, he said, referring to calculated figures that suggest labour costs makes up 35% of the price of a pub pint, versus 11% of a beer in a supermarket.
Martin argued this adds to existing tax inequalities between pubs and supermarkets, such as supermarkets exemption from VAT on food sales, whereas pubs pay 20%. “This tax advantage allows supermarkets to subsidise the price of beer they sell,” he said.
“The VAT distortions that exist today will inevitably create more supermarkets and less pubs.”
Martin called on Kier Starmer to redress this imbalance. “Given the public’s love of pubs, the only possible explanation for this tax discrepancy is that prime ministers and other legislators, in the 45 years since Wetherspoon started trading, have been dinner party goers, rather than pub goers.”
He made the comments as Wetherspoons posted a trading update for the 25 weeks to 19 January.
The company reported like-for-like sales growth of 5.1% with bar sales up 4.5% and food sales up by 5.6%.
LFL sales for the main Christmas period, the three weeks from 16 December to 5 January, were up 6.1%.
In the year-to-date, the company has opened two pubs and plans to open a total of nine in the year, including sites at London Bridge station, Manchester Airport, and Bath.
Six pubs have been sold in the year, giving a rise in cash inflow of £4.1 million. The company currently has 796 pubs.
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