Tim Martin "perplexed" by Ted Tuppen's tax claims

Tuppen recently said that supermarkets may have to be “bullied” into adopting a responsible-pricing strategy on alcohol, and called for a reduction in beer duty.

However, in a letter to the PMA, Martin admitted to being perplexed at Tuppen’s views on VAT and duty.

Tuppen pointed out something that he believed might be behind this definition of ‘cost of tax paid’.

He said: “If I spent £10 of my taxed income in a supermarket, buying a cheap bottle of vodka or an on-offer tray of lager, the entire £10 will go to the Government — it will go to the Treasury in the form of VAT or duty. If I spent my £10 in the pub, the Government would still get a fair whack of it, but not all of it. Some will go to pay the rent, the publican’s profit, the heating and bills and all the other things.”

However, Martin said: “This is confused thinking by Ted; as the trade agrees, Government gets far more tax per pint or measure if people use pubs rather than supermarkets.”

The JDW boss also took issue with Tuppen on the beer-duty escalator.

Tuppen said: “Scrap the duty escalator that will see duty go up by another 7% (at least) this year. Getting rid of it will save 5,000 jobs alone.If necessary for tax neutrality, make up some of the difference on those products — wine, spirits and even cider — so favoured by the duty regime of recent times.”

Martin said: “Ted Tuppen is overtly campaigning for a tax increase on spirits, which he believes are under-taxed, albeit that
beer duty should come down at the same time.

“Any invitation to Government to increase taxes, especially on spirits, will not be welcomed by Ted’s tenants or anyone else in the trade.

“Almost the entire rest of the industry is arguing that beer duty should come down, at least in the medium term, to an equivalent level to spirits or, more precisely to European average levels.”

“The industry needs a clear message to the effect that excise duty needs to get to the European average and the VAT disparity with supermarkets needs to be erased.

“Since pubs pay so much more tax and employ so many more per pint or meal than supermarkets, this will increase state tax receipts.

“If this doesn’t happen all pubs will struggle, but Ted’s pubs may struggle more than most, as they have struggled compared to managed houses with the impact of the transfer of licensing to local authorities.”

Enterprise Inns declined to comment.

• Tim Martin's letter to the PMA can be read below.