United Kingdom

Wetherspoon to reduce prices after hospitality VAT cut

Pub giant Wetherspoon revealed today that it will reduce prices on meals and drinks following the Government's decision to cut VAT on food, coffee and soft drinks.

The chain, which has 867 pubs, has also produced posters praising Chancellor Rishi Sunak as a 'legend' after the decision to reduce VAT from 20 per cent to 5 per cent.

Messages including Sunak's Specials and Dishi Rishi will be displayed alongside details of lower prices on some drinks and food in place from this Wednesday.

The company, which was founded in 1979, said it will fully pass on the tax cut to its customers, including real ale, coffee, soft drinks, breakfasts and other food.

At 764 of its pubs a pint of Ruddles Bitter will now be £1.29, down 50p on average; while a Doom Bar will be £1.79, down 31p; and Abbot Ale will be £1.99, down 40p. 

Lavazza coffee and tea will be reduced to £1.29, down 16p on average; and it will be £1.69 for a 14oz glass of Diet Pepsi and £1.79 for standard Pepsi, down 11p. 

Wetherspoon, which has 867 pubs, has produced posters praising Chancellor Rishi Sunak as a 'legend' after the decision to reduce VAT from 20 per cent to 5 per cent

Breakfasts will be reduced to £3.49, down 41p; pizzas including a soft drink will start from £5.49, down 66p; and burgers and a drink will start from £4.99, down 66p

Prices for real ale will be up to £1 higher at the company's other 103 pubs across the UK, which are located in major town and city centres, airports and stations.

But these pubs will have price reductions of at least 10p per drink and 20p per meal.

What price cuts can Wetherspoon customers expect from this Wednesday? 

Breakfasts will be reduced to £3.49, down 41p; pizzas including a soft drink will start from £5.49, down 66p; and burgers and a drink will start from £4.99, down 66p.

All Wetherspoon pubs including those in town and city centres, airports and stations will see prices reduced for these food deals.

Wetherspoon chairman Tim Martin said: 'Wetherspoon has campaigned for tax equality between pubs, restaurants and supermarkets for many years.

'Supermarkets pay no VAT on food sales and pubs pay 20 per cent. Supermarkets pay about two pence per pint of business rates and pubs pay about 20 pence.

'These tax differences have helped supermarkets to subsidise their selling prices of beer, wine and spirits, enabling them to capture about half of pubs' beer sales, for example, in the past forty years.

'A VAT reduction will help pubs and restaurants reverse this trend - creating more jobs, helping high streets and eventually generating more tax income for the Government.

'Not every UK hospitality business will be able to reduce prices immediately. Some will need to retain the benefit of lower VAT just to stay in business. 

'Others may need to invest in upgrading their premises. However, lower VAT and tax equality will eventually lead to lower prices, more employment, busier high streets and more taxes for the Government. 

'Congratulations to Chancellor Rishi Sunak for a sensible economic initiative, which is long overdue.' 

Seated customers at the Wetherspoon pub Goldengrove in Stratford, East London, on July 4, the day that pubs were allowed to reopen in England from the coronavirus lockdown

A member of staff wearing a face mask serves seated customers at the Goldengrove on July 4

It comes after Mr Martin sold £5million of shares in his pub chain days after the Government announced its £4billion boost for firms in the hospitality sector.

He sold 510,725 shares at a price of £9.84 per share, it emerged last Friday. The sale reduced his stake in the FTSE 250 pub chain he founded in 1979 to 27.4 per cent.

Wetherspoons shares were trading at more than £16 before the pandemic but plunged to a low of £5.59 on March 19, the day before all pubs were ordered to shut.

The no-frills pub chain was boosted by last Wednesday's mini-Budget, when Mr Sunak slashed VAT on food and non-alcoholic drinks by 15 per cent until January.

Mr Martin, a vocal campaigner for tax equality between pubs and supermarkets, said he was 'extremely grateful' for the measures.

Wetherspoons has raised £140million through a share placing and has taken out a £48.3million loan via the Coronavirus Large Business Interruption Loan Scheme.

It re-opened all of its 750 pubs in England on July 4. The remainder are set to re-open in phases, starting with its Scottish pubs on Wednesday.

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