Pubs are facing significant disparities in business rates compared to supermarkets, according to Wetherspoons’ CEO. Tim Martin, the founder of Wetherspoons, highlighted that pubs pay approximately 20 times more in business rates per pint of beer compared to supermarkets. This tax discrepancy results in an additional cost of 28p on the average £5 pint in pubs, significantly higher than the 1.5p paid by supermarkets due to lower overhead costs.
Martin pointed out that supermarkets benefit from not paying VAT on food sales, unlike pubs that pay the standard 20% rate. This advantage allows supermarkets to offer beer at lower prices, effectively subsidizing the cost of alcoholic beverages. As a result, pubs have lost around 50% of their beer trade to supermarkets since 2000, impacting both businesses and local communities.
In response, Greene King, a prominent pub and brewing company, proposed a reform of business rates to be based on profits rather than the current system. The government has also pledged to review and improve the existing business rates framework to support struggling pubs.
The ongoing campaign by The Mirror, “Your Pub Needs You,” advocates for a dedicated government fund to aid pubs, recognition for pubs contributing to their communities, and assistance for community groups interested in purchasing local pubs. Recent data from the Campaign for Real Ale (Camra) revealed that nearly five pubs are permanently closing every week across the UK, with over 600 establishments remaining empty for extended periods.
Despite the challenges faced by the industry, Wetherspoons is defying the trend by announcing plans to open approximately 30 new pubs in the coming year, marking its most extensive expansion in a decade. The chain, which currently operates 794 pubs, has seen fluctuations in its number of outlets over the years but remains optimistic about future growth opportunities.