Tim Martin, the founder and chairman of JD Wetherspoon, has called on the drinking out sector to unite against the tax and regulatory burden onslaught it faces.
Speaking at yesterday’s UK Pub retail Summit, organised by M&C Report in conjunction with the Morning Advertiser, the industry veteran re-ignited his row with Diageo about the drinks producer’s view on alcohol duty.
He also criticised rival Rooney Anand, the chief executive of Greene King, over his views on the subject of minimum pricing and Mark Hunter, chief executive of Coors, for arguing for more tax on cider.
”Three of our biggest companies are campaigning more tax and regulation,” he said.
Martin argued the government was wrong for over taxing alcoholic drinks in the on-trade – and called for other listed pub companies, like Mitchells & Butlers, to reveal the extent of their tax bills.
JDW, which recently revealed it had achieved record sales of nearly £1bn in the past year, paid £400m in tax, he said.
Asked whether he would go through with a promise to de-list Diageo products from JDW pubs, Martin replied: “Yes. If a supplier is adopting a policy which is going to harm the industry you work in, then it is incumbent on people who buy from that supplier to say this is a point against you.”
Martin said the UK pub industry should adopt an approach similar to the French campaigner Jacques Borel, who has successfully advocated that VAT should be reduced in the country’s restaurant trade in a bid to boost the government’s tax coffers.
Martin added: “Tax equality with supermarkets won’t happen tomorrow but it will happen eventually or businesses will be in trouble.”
He also said legislators were reticent to change tack on tax because of Punch Taverns and Enterprise, the country's largest leased and tenanted pubs groups, and what he labelled their refusal to accept the tied pub model was also to blame for the industry's demise.
Martin claimed Punch and Enterprise were like “red rags to a bull” with Government because of the perception that high debt levels had led to over-rented and distressed tenants in many MPs' constituencies.
He also called for more family brewers to step forward to make the argument on reducing tax on alcohol.
“There needs to be a single voice making clear and persistent arguments.
"Punch and Enterprise are extremely unpopular with legislators and MPs are very sceptical about the BBPA.
"Tenants don’t just need to be good, they need to better than good to make a decent profit.
"For many there’s just not enough profit to be made to re-invest in their pubs.”
Martin suggested the BBPA should ask Punch and Enterprise to step outside of the organisation for a few years while the tenanted operators sorted out their problems.
Punch leased division boss Roger Whiteside said he didn’t accept Marti's argument and that the primary problem was that pubs had failed to respond to customer needs.
Rents have gone down and discounts have gone up within the Punch estate in the past couple of years.
Whiteside said he “didn’t have a simple solution” to the problem of the industry speaking with a united front.
“We have very strong personalities at the heads of these businesses.”
