Pub chain calls for government help after alcohol U turn

The well known pub and restaurant chain JD Wetherspoon have renewed their call for help from the government to help pubs in their price war with supermarkets. This comes in the wake after the government did a U Turn earlier this week on their promise to establish a minimum price for alcohol.

Wetherspoons, just having announced that they had a 3% drop in the pre-tax profits for the first half, argued the point that the longstanding trend that existed for supermarkets to take away pubs market share by offering alcohol at much lower prices seriously needed to be addressed. The chairman of the company, Tim Martin, said that when it comes to supermarkets, pubs cannot compete due to the British tax regime.

Wetherspoon’s are a major player in the campaign to cut the VAT that is currently levied on the pub and restaurant sector in the UK. They also believe that any measures taken to encourage drinkers to go to the pub instead of drinking in the house will curb binge drinking. The government has dropped its pledge to create a minimum price per unit for alcohol following intense lobbying from the drinks industry who have said that such a measure as this would penalise those consumers who are the worst off financially.

In the 6 months ending on the 27th January, Wetherspoon’s achieved sales of £626.4m, a rise of 10% for the same period last year, and attributed to the opening of several new pubs. In the 6 weeks up to the 10th March, like for like sales, which takes new openings out of the equation, were up 7.3% on last year, which was stronger than expected. Their pre tax profit was up 5% for the first half at £34.8m, but after eliminating the exceptional items it actually showed a drop of 3%.