Speaking at the All Party Parliamentary Beer Group Christmas reception, William Lees-Jones, MD of JW Lees in Manchester, said the “cumulative costs and regulatory burden” needed to reviewed “urgently”.
He said while the recent 1p cut in duty was welcome, he put it into context with the wider costs the recent Budget had imposed on the sector."
Considerable stress
Lees-Jones added: “The beer duty cut will save us £95m, but the increases in employment costs will cost us £450m.
“The increase in national insurance contributions and the rises in employment costs will place considerable stress on an already fragile sector. These costs are substantial and will affect the viability of many of our beloved pubs.
“Unfortunately, the price of a pint will have to go up. Our margins are under huge pressure as are the personal finances and many of our customers. The industry wants to invest, the industry wants to create growth.”
He added that while the promise to reform business rates was welcome and something the sector had been advocating for many years. “At last we have the opportunity to create a fair and business friendly system that no longer penalises pubs and we’re grateful the Government has recognised the need for this reform.”
However, he said the changes to business property relief were a huge area of concern, particularly for family, businesses like his.
Solution needed
The operator added: “We’re a seventh generation family business founded in 1828. We’re proud custodians of what I think is a brilliant business. Last year we already paid £26.3m worth of tax to the treasury and the revenue and customs, which is 27.6% of our turnover and 5.3 times more than we made profit.
“Around 81% of our gross profits already go straight to the Government, so don’t be greedy.”
He said his company invested in the business last year and created 78 new jobs. “We now employ more than 1,600 people and we’re very proud of that. But companies like JW Lees are under huge pressure. We would challenge some of the government statistics put forward in their presentation of business property relief changes.”
He said the industry would like to find a solution and sit down with Government “like grown ups” and do everything it can to come up with a fair tax system.
He added: “Pubs are much more than casks, carpets and beer pumps - they’re the heart and soul of our communities. They provide unique spaces where people come together. The value of the pub and beer sector is far beyond economic contributions.”
