UK consumers may start to boycott European drink suppliers in response to the "hectoring and bullying" of European leaders with regards future trade deals in the light of Brexit.
This is the view of Tim Martin, chairman of pub giant Wetherspoon, who was speaking as the company published a trading update for the first quarter of its financial year.
Like-for-like sales and total sales for the group during the 13 weeks to 23 October 2016 increased by 3.5% and 2.3% respectively. However, the level of like-for-like sales reduced to 2.3% in the last five weeks of the period.
Meanwhile, the operating margin, excluding property gains, was 8.6%, compared with 5.8% in the same 13 weeks last year. The company currently anticipates an operating margin of around 7% for the current financial year.
Martin said that the UK is faced with the threat arising from Angela Merkel of Germany and François Hollande of France supporting the stance of "the unelected EU ‘President' Juncker in stating that the ‘UK must pay a price'".
"According to press reports, Juncker told European business leaders, in October, not to negotiate with UK companies and to adopt an ‘intransigent'" attitude. This suggested approach puts an unfair burden on the excellent European suppliers with which UK companies, like Wetherspoon, have traded for many decades.
"For example, Wetherspoon normally agrees on trade deals with suppliers for three to 10 years. If we, and companies like ours, are unable to agree on tariff-free transactions, it will inevitably result in a loss of business for European companies which have done nothing to deserve this outcome. Indeed, the ultimate sanction will be in the hands of UK consumers, should they take offence at the hectoring and bullying approach of Juncker and co. French wine, Champagne and spirits, German beer and Swedish cider, for example, are all at extreme risk."
Wetherspoon has opened one new pub since the start of the financial year and has sold nine, and intends to open about 15 pubs during the course of the year. Although the company expects to face higher costs with regards wages, business rates and repairs, it plans to increase the level of capital investment in existing pubs from £34m in 2015/6 to around £60m in the current year.
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