JD Wetherspoon has refuted a allegations by CAMRA and SIBA regarding its current marketing campaign in relation to its VAT reduction to customers.
In a joint statement Tom Stainer, Chief Executive of CAMRA, and James Calder, Chief Executive of the Society for Independent Brewers (SIBA) said: “A recent promotional poster from pub chain JD Wetherspoon has made it necessary for us to clarify that the Chancellor’s temporary VAT reduction only applies to food served in pubs, and excludes alcoholic drink sales which many traditional local pubs rely on for survival.
“Like all pubs, Wetherspoons will not be able to benefit from a VAT reduction on beer sales and it is disappointing to see them potentially mislead customers into believing cheaper beer prices are as a direct result of the Chancellor’s measures. It’s likely JDW can only offer these prices if it subsidises beer from increased profit on other revenue streams. Sadly, this is a strategy many independent, wet-led pubs do not have open to them.
“We’d hope consumers do not mistakenly believe CAMRA or SIBA have endorsed this marketing approach – which we believe is unhelpful for the pub industry as a whole and masks the truth that this VAT reduction will not directly result in cheaper beer prices and does little to help a large proportion of Britain’s pubs and brewers.”
In response a spokesman for Wetherspoons said it is “untrue” that the VAT reduction only applies to food. “The reduction applies to soft drinks, coffee, tea, snacks, crisps and cakes which are sold in almost all pubs. Wetherspoon’s biggest draught product for example is Pepsi, a soft drink, and this is true of many pubs. In addition, the vast majority of pubs sell food. It is true that the chancellor’s measures do not directly lead to lower beer prices.
“However publicans can choose to reduce prices for food, soft drinks and coffee et cetera or they can choose to keep those prices the same and reduce the prices of alcoholic products such as draught beer. Wetherspoon has chosen to apply about one third of the tax reduction to meals and about two thirds of the tax reduction to draught beer.”
“Individual publicans can make their choice and most are aware that supermarkets have used their tax advantage over pubs(i.e. they pay no VAT on food sales) to reduce the price of beer, wine and spirits. The main effect of the historic tax inequality in respect of VAT on food has been that the price disparity between supermarkets and pubs in respect of beer has widened inexorably. In Wetherspoon’s opinion, sensible publicans will ignore CAMRA/SIBA and seek to close the gap in beer prices.”
CAMRA and SIBA argued Wetherspoon’s marketing approach is “unhelpful for the pub industry as a whole (and) will not directly result in cheaper beer prices”.
However, Wetherspoon is said: “The chancellor’s tax cut will directly result in lower tax prices for every pub, since all pubs sell soft drinks and snacks, at least. It will be up to individual publicans to choose whether they use the tax cuts to reduce the price of a pint.”