Wetherspoon boss Tim Martin criticises rivals for failing to speak out over unfair tax on pubs

The chairman of the pub chain said pubs have suffered from a tax disparity with supermarkets

Click to follow

The founder and boss of the 900 plus-strong JD Wetherspoon pubs chain, Tim Martin, has criticised some of his larger rivals for their silence over unfair tax.

He warned that the pub trade faces as big a shake-up as hit the banks in 2008 and the supermarkets over the past year.

Martin said there was a growing gap between the cost of eating and drinking in pubs and doing so at home.

"This differential has been created and increased by the fact that business rates per pint are far higher in pubs," he said.

"And that supermarkets pay no VAT in respect of food, whereas pubs pay 20 per cent, enabling supermarkets to subsidise the price of beer and other products." Martin claimed: "A number of major pub companies believe that they can avoid the resulting malaise by investing in out-of-town pubs which are really 'quasi-restaurants'.

"Unfortunately, these businesses too are already starting to suffer the effects of the tax disparity with supermarkets and they will clearly, in our view, be unable to escape the consequences of an unequal tax system."

His remarks came as Wetherspoon reported a slowdown in sales growth since Christmas and also said its profit margin was dropping.

In the past 12 weeks Wetherspoon’s sales from pubs open at least a year grew by 2.8 per cent, which was well down on the 6.3 per cent seen in the previous quarter. In December growth was just 2 per cent and even less in the past fortnight.

At the same time margins have dropped by 0.9 per cent to 7.3 per cent in the first half as pay rises and even greater price competition from supermarkets kicked in. Wetherspoon shares dropped 21p to 798p.

Martin said: "Following chaos at our banks, the supermarkets themselves have recently witnessed a situation where the tectonic plates of the industry moved, even though the boardrooms at the major industry players were oblivious to this fact.

"That is the position now in the pub industry and the companies that do not speak out about the dangers of tax inequality are likely to be those that suffer most in the future."

He also criticised the pub trade newspaper, the Publican’s Morning Advertiser, saying it too had failed to back the campaign for tax equality with supermarkets.