SIBA chief: drop VAT to help pubs
A brewers' trade group has urged the Government to halve VAT for the hospitality industry as a positive way to rejuvenate the sector.
Julian Grocock, chief executive of the Society of Independent Brewers (SIBA), said he welcomed the intent of the Government's ban on below cost sales but did not agree with the definition of duty plus VAT.
SIBA is particularly concerned that no cost of production has been included in the definition.
"If it is an indication of intent then we are supportive but we are keen to offer some further suggestions to the Government," he said.
"It is not just about raising prices because that is never going to popular but it is about bringing balance into the retail of beer, which is sold in two distinctive and separate market places.
"There could be more positive steps to help pubs rather than some weak remedial action against supermarkets."
Grocock said a halving of VAT to 10% — or even a drop to 5% — in the on-trade could provide a catalyst to the sector. "A reduction in VAT for the hospitality sector, on beer and food, would be widely supported," he said.
Grocock cited the example of France, where tax was reduced from 19.6% to 5% for restaurants to entice people out.
Stupidity
Meanwhile, multiple operator Tony Brookes of the Head of Steam group, slammed the Government's definition of below cost. "It is hard to believe the stupidity of the government," he said.
"Have they ever heard of mathematics and economics?"
He argued that a cost of production must be included and suggested a march on Parliament in protest, boycott of supermarkets and a national petition. "Selling alcohol below its true cost is immoral, socially-irresponsible, indefensible and should be outlawed in law and the pub trade should never give up fighting to stop it.
"Supermarkets should sell bread, eggs, milk or other food staples that are basic, necessary foods for all people, rich or poor, if they want to compete with each other — they should not use alcohol. It's wrong."
