JDW hits back at ‘misleading customers about cheaper beer’ claims
This refers to a promotional poster from JDW, which shows four pints labelled ‘Sunak’s Special’s’ at the group’s new reduced prices and says ‘lower VAT = lower prices’.
It also hails Chancellor of the Exchequer Rishi Sunak as ‘legend = the man who instigated tax equality between supermarkets and pubs’.
This comes as JDW announced it was reducing food and drink prices across its pub estate a week after it revealed that they were set to increase.
However, CAMRA and SIBA, whose logos both appear on the poster, have criticised the marketing, claiming it insinuates the VAT cut announced by Sunak on food and soft drinks from 20% to 5% for hospitality businesses, has meant beer is cheaper too.
A joint statement from CAMRA chief executive Tom Stainer and SIBA chief executive James Calder said: "A recent promotional poster from pub chain JDW has made it necessary for us to clarify that the Chancellor’s temporary VAT reduction only applies to food served in pubs, and excludes alcoholic drink sales which many traditional local pubs rely on for survival."
Unhelpful for industry
The statement also said: "Like all pubs, JDW will not be able to benefit from a VAT reduction on beer sales and it is disappointing to see them potentially mislead customers into believing cheaper beer prices are as a direct result of the Chancellor’s measures. It’s likely JDW can only offer these prices if it subsidises beer from increased profit on other revenue streams. Sadly, this is a strategy many independent, wet-led pubs do not have open to them.
"We’d hope consumers do not mistakenly believe CAMRA or SIBA have endorsed this marketing approach, which we believe is unhelpful for the pub industry as a whole and masks the truth that this VAT reduction will not directly result in cheaper beer prices and does little to help a large proportion of Britain’s pubs and brewers."
A spokesperson for JDW said the pub group had chosen to apply a third of the VAT cut to food and the remaining two thirds to draught beer.
On the comments the VAT reduction only applies to food, the spokesperson said: “This is untrue. The reduction applies to soft drinks, coffee, tea, snacks, crisps and cakes which are sold in almost all pubs. Wetherspoon’s biggest draught product for example is Pepsi, a soft drink, and this is true of many pubs. In addition, the vast majority of pubs sell food.
“It is true the Chancellor’s measures do not directly lead to lower beer prices. However publicans can choose to reduce prices for food, soft drinks and coffee etc or they can choose to keep those prices the same and reduce the prices of alcoholic products such as draught beer.
“JDW has chosen to apply about one third of the tax reduction to meals and about two thirds of the tax reduction to draught beer.”
Lower tax prices
They went on to outline how it is up to individual publicans to choose where to reduce their prices in their pubs.
The spokesperson added: “Individual publicans can make their choice and most are aware that supermarkets have used their tax advantage over pubs (i.e. they pay no VAT on food sales) to reduce the price of beer, wine and spirits.
“The main effect of the historic tax inequality in respect of VAT on food has been that the price disparity between supermarkets and pubs in respect of beer has widened inexorably.
“In JDW’s opinion, sensible publicans will ignore CAMRA/SIBA and seek to close the gap in beer prices.
“The Chancellor’s tax cut will directly result in lower tax prices for every pub, since all pubs sell soft drinks and snacks, at least. It will be up to individual publicans to choose whether they use the tax cuts to reduce the price of a pint.”
