Pubs to Drop Drinks Prices on September 25th

The campaign for a VAT reduction to 5% for the pub industry (Tax Parity Day) is hotting up!

The planned day of action looms where thousands of pubs are due to reduce their prices by 7.5% which would mirror the effect of the reduction of VAT to 5%, the anticipated effect of the action days is to see growth in sales of 8%. Sorry about all of the numbers, but it is a mathematical equation to underpin the message that a permanent VAT reduction would see growth of employment and development in the leisure sector.

Tax parity twixt pubs and supermarkets is the goal in all of this, which in turn would likely persuade more people to visit the pub rather that sit lonely at home supping Ale!

Here is the argument; Supermarkets in effect pay little or no VAT on food whereas pubs pay 20%, this enables supermarkets to subsidise their sales of alcohol, this in turns results in a huge gap between pub and supermarket prices. The VAT Club, headed up by Jaques Borel (see my previous blogs) are seeking to have VAT in pubs reduced to 5%, and their case is; Since a pint in a pub is three to four times more expensive than a supermarket the cash VAT per pint levied by the government would be similar in supermarkets and pubs if VAT was reduced as they suggest.

Just one issue, it apparently would cost HMG £12 billion to do it!

Support your pub, visit it on the day of action, put Wednesday 25th September into your diary!

7.5% VAT Cut In Pubs and Restaurants for 'Tax Parity Day'

Jacques Borel, the 'VAT cut' campaigner has recruited some heavyweight players to join his "National day of Action" where pubs, restaurants et al will reduce their prices by 7.5% to show just what happens with such a reduction. In France when this was trailed, sales grew by some 8% on the day of action.

His campaign is to persuade government to reduce VAT from 20% to 5%, thereby giving tax parity compared to supermarkets for the 'on–trade'. His claim is that such a reduction would mean more growth, sales and employment within our sector. The 7.5% reduction on the day of action is the impact that it is estimated would result from the desired VAT cut to 5%.

Tim Martin the hero of JD Wetherspoon commented "We wholeheartedly support this initiative for Tax Parity Day, we are aiming to make it our busiest day of the year".

Says Jacque "Creating Tax parity between pubs, Restaurants and supermarkets will fulfil many government objectives. It will create jobs, and will raise the amount of taxes the government receives, since pubs and restaurants pay more taxes and create more jobs than supermarkets. It’s a win–win situation for government, voters and our industry".

Many say he is swimming against the tide. Well, many people also said that the chancellor wouldn't stop the Duty Escalator. But he did, didn’t he!

Who knows, with so many of the top players supporting Jacque, he could well work a miracle. Who else is supporting this? Well, catch a load of these top names; Heineken, Brains, Sheperd Neame, Punch, Charles Wells, Pizza Hut, Subway and Roadchef!

Look out for it in your local. September 25th is the date – book a table! And good luck say we.


Martin Read CMBII
Managing Director of Inn-Dispensable Personal Licence Courses