Wetherspoon threatens Diageo boycott

JD Wetherspoon boss Tim Martin says he'll throw out Diageo products if the drinks giant stands by its 'anti-pub' stance on alcohol duty.

Martin labelled Diageo a "bunch of morons" for its call for the alcohol duty escalator to remain for all products except spirits, which it made in its submission to the Treasury's review of alcohol taxation and pricing.

Diageo, owner of eight of the world's top 20 premium spirit brands, as well as the iconic stout Guinness and Blossom Hill wine, called for a unit of alcohol to be taxed at the same rate for all products. This argument is known as "equivalence".

Diageo said the "simplest way" to do this would be to freeze spirits duty. The controversial duty escalator — 2% above inflation — would be added to other categories until they reach the level of spirits.

The company said this would generate between £524m and £1.9bn a year for the Treasury, with no additional impact on the industry than will already result from the Government's planned RPI+2% escalator and 2.5% VAT rise.

Diageo Great Britain managing director Simon Litherland said: "Our recommendation to the Treasury is the fairest and most transparent way to approach taxation of alcohol. It will bring revenue to the Government and will mean that the more alcohol in the drink, the more tax it will pay."

Damaging​

Martin told the Morning Advertiser​: "I think Diageo should consult their customers more before they make these sorts of statements.

"The escalator is damaging for pubs. We feel that, as a matter of extreme urgency, tax and regulation of pubs needs to be reduced. We are paying 40% of our sales as tax. At the current time tax on a typical pint of beer in a pub that sells for £2.50 is a quid. And we've got a complete bunch of morons at Diageo who say it should go up — but not for them!

"Their lobbying is so transparent — that everybody else pays, but not Diageo.

"When our contract comes up for renewal, unless Diageo radically changes its tune, it won't be renewed."

In response to plans to tax "problem drinks" more, Diageo urged that ready-to-drink brands be left out, saying they're "not the drink of choice" for underage drinkers or bingers.

Shepherd Neame chief executive Jonathan Neame also rejected Diageo's equivalence argument for duty.

"I think the tide has turned away from this argument, and in that context it seems a rather foolish position.

"I find it a largely impossible position that Treasury ministers would wish to make vodka relatively more cheap than beer or other products."

In its submission, the British Beer & Pub Association (BBPA) said having duty increasing in line with ABV would create 29,500 jobs, mainly in pubs and hospitality.

The current system "penalises" beer, the BBPA said — alcohol in the form of beer costs 42p per unit on average, compared to 37p for vodka and 33p for cider.