British supermarkets are embroiled in a battle for marketshare amid a drastic pricing war.
But, with grocers selling increasingly cheap alcohol due to governmental tax breaks, more and more Britons are opting to stay at home and drink rather than venturing out to their local pub.
That’s why the one of the UK’s biggest pub chain’s, JD Wetherspoon, CEO sent a stark warning out to the markets when issuing the group’s interim results today.
“The biggest danger to the pub industry is the continuing tax disparity between supermarkets and pubs,” said Tim Martin, Chairman of J D Wetherspoon in a statement.
“Thanks mainly to the work of Jacques Borel’s VAT Club, there is a growing realisation among politicians, the media and the public that pubs are overtaxed and that a level tax playing field will create more jobs and taxes for the country.”
For the 26 weeks ended 25 January 2015, compared to last year, Wetherspoons reported a mix set of results.
- Revenue: Up 9% to £744.4m
- Like-for-like sales: Up 4.5%
- Operating profit: Down 1.1% to £55.1m
- Profit before tax & exceptional items: Down 0.9% to £37.5m
According to the British Beer & Pub Association, there are only 48,006 pubs in the UK, compared to the 67,800 in Britain in 1982. Four pubs are estimated to be closing every week. The average price for a pint of beer is around £3 in the UK although it drastically vary depending on the region.
However, the tax on a pint of beer rose to 99p in 2014, from 66p since 2005.
According to the Alcohol Health Alliance, “alcohol bought in supermarkets and off-licences is 61% more affordable than it was in 1980.“