Industry leaders say VAT Club must face facts

The warnings from senior pub industry figures came after the Independent Family Brewers of Britain (IFBB) withdrew group support from Jacques Borel’s campaign to cut VAT to 5% for the UK hospitality sector.

Speaking at last week’s Tenanted Pub Company Summit, Kate Nicholls, strategic affairs director at the Association of Licensed Multiple Retailers, said the “political reality” was that the Government had little room to manoeuvre.

She said: “We have to keep making that case and explaining that we are facing a disincentive when it comes to supermarkets. The question is levelling up supermarkets and making sure they are subject to the same constraints and restrictions that we have rather than us having further costs imposed on us.”

Brigid Simmonds, chief executive of the British Beer & Pub Association, agreed the campaign had little chance of success in this Parliament.

Billions​

She said: “A cut to 5% would cost billions. Even a reduction to 15% VAT, and lets bear in mind this would not only apply to pubs, you’re talking about at least £1bn. It has been made very clear to us that the Treasury isn’t interested in offering that sort of support to our industry.”

She added: “It’s very much a medium to long-term goal but I don’t think it’s something that’s going to happen this side of the election. After the election people are going to be looking for big things to do and without doubt we do have an issue that it is so much cheaper to buy alcohol in the supermarket. “

Andy Slee, central operations director at Punch Taverns, said: “Punch will be supporting VAT Day again, however I do question some of the gunboat diplomacy that has come about in the past few weeks, particularly aimed at pub companies.

“The tactic seems to be the louder people shout at us the more likely we are to support the campaign, which is puzzling. I hope there’s a better level of diplomacy when we’re talking to politicians.

“As an industry we have demonstrated what we can do when everyone got behind the single issue, as you saw with the beer duty campaign. Any campaign at all will need that level of support.”

Support​

The IFBB announced last week that after coming to the end of its three-year £240,000 collective deal it was now leaving it up to individual members to support the campaign if they wanted.

Borel told the PMA that 15 members of the IFBB, including Fuller’s, “have made the decision to renew their commitment (representing 69% of IFBB membership funds) until 30 September 2015.

“A further eight members have not yet decided (representing 12% of IFBB membership funds) and five members have decided not to continue (representing 19% of IFBB membership funds)”.

Tim Martin, chairman of JD Wetherspoon, last week criticised those pubcos that had not joined the VAT Club and the PMA for not supporting the campaign.