Wetherspoon’s Launches One-Day Price Cut Campaign to Highlight VAT Inequality

Pub chain Wetherspoon’s will implement a temporary 7.5% price reduction across all food and drink items this Thursday in a bold demonstration of what permanent VAT reform could mean for the hospitality sector.

The nationwide promotion, timed for what the company terms “Tax Equality Day”, seeks to illustrate the competitive disadvantages facing licensed premises due to current VAT disparities between on-trade establishments and retail outlets.

The initiative draws attention to the significant VAT differences affecting the industry. While pubs, bars and restaurants face 20% VAT on all food and beverage sales, supermarkets benefit from zero-rated VAT on food products. Industry leaders argue this creates an uneven playing field that enables retail chains to cross-subsidise alcohol sales using savings from food VAT exemptions.

Tim Martin, Wetherspoon’s founder and chairman, emphasised the long-term pressures facing the pub sector. He highlighted how the current tax structure creates fundamental competitive disadvantages for hospitality businesses, particularly when competing against supermarket alcohol pricing.

The pandemic period saw temporary relief for the sector, with hospitality VAT reduced to 5% in July 2020, before rising to 12.5% between October 2021 and March 2022, ultimately returning to the full 20% rate.

The campaign has garnered backing from three major trade bodies: UKHospitality, the British Beer and Pub Association, and the Campaign for Real Ale (CAMRA).

UKHospitality chair Kate Nicholls OBE, said:
“A reduced rate of hospitality VAT across the UK means lower prices and more jobs, leading to the regeneration of our high streets and communities.”

The broader context reveals ongoing pressures facing the pub industry. Wetherspoon’s current estate comprises 794 establishments, representing a decline from 955 locations in 2015, despite opening three new sites in the past year while disposing of nine others.

This trend reflects wider industry challenges, with approximately 5,000 pubs closing across the UK since 2016, highlighting the structural pressures facing traditional licensed premises.

The campaign directly appeals to the Chancellor for policy intervention, advocating for a permanent VAT reduction to 12.5% for hospitality businesses. Proponents argue such reform would create more equitable competition between on-trade and off-trade sectors while supporting job creation and business investment.

The one-day demonstration aims to provide customers with tangible evidence of how VAT reform could impact pricing across the hospitality sector, while building momentum for longer-term policy discussions around tax equality in the licensed trade.