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A pint of beer
Support for reform of pub tax laws in growing, according to Wetherspoon's boss. Photograph: Alamy
Support for reform of pub tax laws in growing, according to Wetherspoon's boss. Photograph: Alamy

Wetherspoon's boss says pub tax campaign gaining support

This article is more than 10 years old
Tim Martin says new supporters for the VAT Club campaign 'realise that the tax system for pubs is unfair'

JD Wetherspoon's chairman says the campaign for tax changes to help pubs survive has gained momentum after a string of big industry names gave it their backing.

Tim Martin said a range of big backers had joined the VAT Club campaign in the last few weeks, giving it extra clout ahead of the next election.

New supporters include Matthew Clark, a big drinks supplier to the hospitality trade, coffee brand Lavazza, Magners cider producer C&C, Villa Maria wine and Pizza Hut.

Martin said: "About a dozen have joined in the last six-to-eight weeks. There's a realisation that the tax system for pubs is unfair and overly burdensome and is contributing to their closure.

"We've reached the end of the beginning. The first step was to galvanise publicans and suppliers behind the campaign. Over the next 12 months we will be trying to persuade politicians that if you want pubs, an active high street and jobs then you need change."

Martin and the campaign's other backers want VAT on food and drink in pubs and restaurants cut from 20% to 5% to help them compete more equally with supermarkets selling cheap alcohol. He said 10,000 pubs had closed in the last decade and that more would go to the wall, reducing the Treasury's tax income, unless a change was made.

Martin made his comments as Wetherspoon announced strong business over the Christmas trading period. Sales at pubs open a year or more rose 6.7% in the 12 weeks to 19 January and total sales rose 10.6%. Sales growth quickened as the first half of the company's financial year progressed.

The company's shares rose 2.2% to 806.5p.

Martin opened his first pub in 1979 and Wetherspoon now has more than 800 branches. It has thrived by offering cheap beer and food even as pubs have closed at record rates across the country.

Martin said Wetherspoon's success was also down to paying its staff well, training them and keeping a close eye on standards in pubs. "Our average pub manager has been with us about 10 years in an industry where people tend to move about so that's a plus. I've called on 11 pubs in Yorkshire this week and I think my colleagues and I make more calls in pubs than people at other companies."

Wetherspoon said it opened 18 new pubs so far this financial year and that work was underway on 11 more, putting it on track to open between 40 and 50 by the end its financial year in July. It opened its first motorway services pub off the M40 this week to protests from road safety campaigners.

Investment in new pubs will reduce Wetherspoon's first-half operating profit margin and slightly increase its corporation tax rate because of higher spending on items excluded from tax relief. The company is investing in training, IT and extra staff.

The company is concentrating on increasing sales and opening new pubs with its customers suffering a continued squeeze from falling real wages.

Analysts at Numis cut their forecast for full-year pretax profit by 4% to £77.4m because of pressure on Wetherspoon's profit margin but kept their "add" recommendation.

More on this story

More on this story

  • Wetherspoon pubs: soulless drinking pits, or a mainstay of the high street?

  • Let's hope it's not closing time for the traditional pub

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