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Don't take it lying down

16 April 2012

Tim Martin, chairman and founder of JD Wetherspoon, argues that pub and restaurant CEOs should be quicker to defend their own corner

The pub and restaurant industry in Britain has been a relative under-performer compared with the best international companies. Where is the British McDonald's, KFC or Burger King, for example?

One of the skills that our industry needs to acquire is the ability to defend its own corner on intellectual and presentational levels.

The furore over Cornish pasties, shaking the foundations of 10 Downing Street itself, shows how our take-away and supermarket rivals get their act together when their vital interests are threatened.

The pub industry, for example, has seen its taxes rocket in recent years, with excise duty alone increasing by 40%. In contrast to the mayhem over VAT on pasties, the excise duty increase will cost Wetherspoon alone £7m in the next 12 months. Meanwhile, two "stealth" taxes in respect of machine duty, and a late-night levy will add another£4m per year.

The almost completely deafening silence in the media in respect of these increases is an indictment above all on the directors of major pub and restaurant companies, who have persistently failed to make a strong argument in favour of their industry. Their attitude seems to range from "there's nothing we can do about it" to "we leave this to trade organisations" or "we're all in the same boat so it doesn't matter".

The intellectual argument, rarely made by pub or restaurant CEOs, in my experience, is that our industry generates far more jobs and taxes per pint or per meal than supermarkets, so paying VAT at 20% in respect of food sales, when supermarkets pay almost nothing, is bad for jobs and the economy.

Come on, CEOs, let's start getting our act together. In France, restaurants and bars pay 7% VAT, and similar rates apply elsewhere, yet we're paying 20%. Above all, that is a failure of the CEOs in the pub and restaurant industry in this country.

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Jacobs Media Group is honoured to be the recipient of the 2020 Queen's Award for Enterprise.

The highest official awards for UK businesses since being established by royal warrant in 1965. Read more.

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