JD Wetherspoon chairman Tim Martin has hit back at chancellor Philip Hammond's Budget, arguing it doesn't do enough to support pubs from increasing cost pressures.
Wetherspoon's share price dipped in morning trading as investors took note of Martin's warning that lower sales and increased costs in the second half of the year will hit the pub group.
In his results statement, Martin said Hammond had a "Budget for dinner parties" as "dinner parties will suffer far less from the taxes… whereas many people prefer to go to pubs, given the choice".
Martin was referring to the tax disparity between supermarkets and pubs, which he said is the biggest danger to the pub industry.
"As previously indicated, we understand the need for the government to raise taxes. However, there should be a sensible rebalancing of the taxes paid by pubs and supermarkets, if the pub industry is to survive in the long term," he said.
Martin said supermarkets pay less than 2p per pint for business rates, whereas pubs pay around 18p per pint. He added pubs also pay VAT of 20 per cent in food sales, but supermarkets pay almost nothing.
"Wednesday's budget will weigh far more heavily on pubs than supermarkets, especially since wage costs per pint or meal are approximately 10 times higher in pubs," he said.
Cost headwinds are increasing
In reference to the £1,000 rate relief for pubs with a ratable value of less than £100,000 (i.e., not Wetherspoon), Martin said that sum is overshadowed by tax and regulatory increases, including business rates (which will cost Wetherspoon £7m in the next year), electricity taxes (£4m), the excise duty (£7m), the apprenticeship levy (£2m).
"The chancellor was less than frank in his budget speech, since he did not spell out the duty increases, giving the impression to many that there would be no increase," he said.
In his speech, Hammond said he will make no changes to "previously planned upratings", which means alcohol duties are set to increase 3.9 per cent with inflationary rises.