TIM Martin, the outspoken executive chairman of the JD Wetherspoon pub chain he founded in 1979, has called for the Treasury to rein in an “unsustainable” level of tax levied on pubs.
Wetherspoon’s tax bill tallied to £453.1m in the 13 weeks to 21 October, compared with a profit after tax of just £46.8m. This included VAT of £204.8m and excise duty of £120.2m, the firm added.
Two pubs a day are closing across the UK, according to a study published last month by the Campaign for Real Ale (CAMRA), as brewers struggle with tax increases on alcohol, tough competition from supermarket and the squeeze in consumer spending.
Figures from CAMRA reveal that between last December and June, 166 pubs closed in the capital.
In May, drinks industry leaders wrote to the chancellor George Osborne complaining that beer duty had risen by 52 per cent since 2004.
“The biggest danger to the pub industry is the tax disparity between supermarkets and pubs, creating a serious and unsustainable competitive disadvantage,” Martin said in a statement, repeating comments made at the time of the firm’s full-year results in September.
“In addition, our pubs pay far higher VAT than those of our nearest neighbours, Ireland and France, as well as having the second highest rates of excise duty on beer and wine in Europe.”
JD Wetherspoon has battled on against a worsening consumer backdrop and margin pressures to report a 1.1 per cent rise in like-for-like sales in the first quarter of the year.
Wetherspoon said sales had been “resilient” in the period, increasing by 7.3 per cent while operating margin was 9.3 per cent, approximately 0.2 per cent lower than that achieved during the last financial year.
The group added 10 new pubs in the period to its existing estate of 823 pubs, and plans to open another 50 outlets this year.
Martin has reportedly said in the past that the UK could sustain at least 16,000 Wetherspoon pubs.
Greg Feehely, head of leisure research at Altium Securities, said: “The near term outlook remains challenging... We retain our view that the pressures on the consumer will alleviate marginally in 2012 as inflation subsides which just leaves alcohol duty as our main concern.”
Shares in the group closed up 0.95 per cent at 426p yesterday.