The Society of Independent Brewers and the Campaign for Real Ale have taken steps to distance themselves from a JD Wetherspoon poster campaign which they consider misleading.
The poster implies that cheaper beer is available at the bar chain because of Chancellor Rishi Sunak’s move last week to help the accommodation industry with lower VAT. However, the VAT cut applied only to food and accommodation.
However, on the argument that the VAT cut only applies to food, Wetherspoon spokesman Eddie Gershon said: “This is untrue. 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.”
On CAMRA’s and SIBA’s assertion that the poster misleads customers into believing cheaper beer prices are a direct result of the Chancellor’s measures, he said: “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 etc, 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 (ie 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.”
Finally, on CAMRA’s and SIBA’s view Wetherspoon’s marketing approach is “unhelpful for the pub industry as a whole … (and) will not directly result in cheaper beer prices”, he 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.”
Tom Stainer, chief executive of CAMRA, and James Calder, chief executive of 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.”