Tim Martin says tax disparity ‘biggest threat’ to hospitality

JD Wetherspoon chairman Tim Martin has described the disparity in tax between pubs and restaurants and supermarkets as “the biggest threat to the hospitality industry” and said pub industry directors have, in general, “failed” to campaign on the issue.

Martin said: “Supermarkets pay zero VAT in respect of food sales, whereas pubs and restaurants pay 20%. This tax benefit allows supermarkets to subsidise the selling price of beer.

“We estimate that supermarkets have taken about half of the pub industry's beer volumes since Wetherspoon started trading in 1979, a process that has likely accelerated following the pandemic.”

He added: “Unless the industry campaigns strongly for equality, it will inevitably shrink relative to supermarkets, which will not help high streets, tourism, the economy overall, or the ancient institution of the pub.”

The comments were made as part of a trading update for the 25 weeks to 22 January 2023, in which the company reported like-for-like sales 13.1% higher than the same period a year ago and 0.7% lower than the same period immediately before the pandemic (the 25 weeks to 26 January 2020).

Like-for-like sales in the last 12 weeks were 17.8% higher than the same period a year ago and were 2% lower than the pre-pandemic period. The group’s like-for-like sales in December were up 21.3%. Martin said he was “cautiously optimistic” about the company's prospects for the financial year.

The company opened two pubs in the period and sold 10 for £2.9m. Thirty-five of its pubs remain on the market and the company has a trading estate of 844 pubs.