Tim Martin accuses pubcos of being “silent” in fight against tax differential between supermarkets and pubs
Speaking at the Business In Sport and Leisure conference in London, Martin said there is a pubco chief executive “inertia” against the difference in VAT paid by supermarkets and pubs.
He said: “Supermarkets don’t pay VAT on food, and pubs do. They can in effect cross-subsidise their beer prices, which is what they do. They put a lower margin on it because they pay no VAT on food. Pubs in the meantime have to pay VAT and I don’t think it’s going to be sustainable because the price differential is so great that pubs will be marginalised.
“A lot of village and town-centre pubs will close down. That will be bad for tax because you get a lot more tax by selling a pint in a pub than you do when selling a pint in a supermarket. There has to be some sort of tax equality between supermarkets and pubs.
“It’s this Government’s inertia. There’s a chief executive inertia in the pub industry too. A lot of pub companies are silent on it.
“The tenants are 100% behind this. They’ve got Tesco Metro next to them and they know how difficult it is to compete. So we need tax equality. It’s the number one issue for us.”
Martin also hit out at the “sheer torrent of legislation” that pubs have to deal with, restricting British businesses from expanding internationally. He said that JDW pays £13,000 in tax per pub per week, equating to £0.5bn a year for the company.
“We have had far too much legislation all of which is debilitating,” said Martin. He questioned why UK-based pub and restaurant companies are not expanding internationally.
“Yes we do well in our own country, but are we world leaders? We are not as good as we should be and I think that it starts at home.”
He added that the late-night levy, which was introduced on 31 October, will cost JDW £2m a year. “The late-night levy, who thinks of these things?” Martin said.
“Haven’t pubs been taxed enough? It will cost us £2m a year. We will have to put our prices up. So even Wetherspoon, which is known for low prices, will be even more anti-competitive with supermarket prices. This can’t go on. Supermarkets don’t pay it. It is absolutely crazy.”
Martin called for the Government to make small changes, rather than introduce big initiatives, to help businesses. He said: “If you want Bradley Wiggins to win the Tour de France ... you try to make lots and lots of small moves.
“A lot of the things that have been going wrong are people trying to make big revolutionary moves, as opposed to lots of small ones. Lots of small moves are the key to improvements in businesses.”
