Pubs boss claim

Scots business rates ‘forcing up price of a pint’

Tim Martin says its Omni outlet pays twice the rates of competitors

Scotland’s system of assessing business rates is forcing up the price of a pint to drinkers north of the border, says Tim Martin, chairman of pubs group JD Wetherspoon.

Mr Martin accused the rates assessor of charging the group higher rates per square foot than its competitors.

In a statement with the company’s annual results, he says: “Business rates are supposed to be based on the value of the building, rather than the level of trade of the tenant.

“This should mean that the rateable value per square foot is approximately the same for comparable pubs in similar locations. However, as a result of the valuation approach adopted by the government “Assessor” in Scotland, Wetherspoon often pays far higher rates per square foot than its competitors.”

Mr Martin says that in the Omni Centre, the leisure complex in central Edinburgh, Wetherspoon has been assessed at more than double the rate per square foot of the average of its competitors, and for The Centre in Livingston “a similar anomaly applies”.

Tim Martin
Tim Martin: consumers are paying higher prices

He adds: “As a result of applying valuation practice from another era, which assumed that pubs charged approximately the same prices, the raison d’être of the rating system – that rates are based on property values, not the tenants trade – has been undermined.

“Similar issues are evident in Galashiels, Arbroath, Wick, Anniesland – and indeed most Wetherspoon pubs in Scotland.

“In effect, the application of the rating system in Scotland discriminates against businesses like Wetherspoon, which have lower prices, and encourages businesses to charge higher prices.

“As a result, consumers are likely to pay higher prices, which cannot be the intent of rating legislation.”

The company said trade for the last three weeks was 2.6% below the equivalent period in 2019, reflecting an improving trend.

It posted an 11.8% fall in like-for-like sales for the half year ending 23 January and pre-IFRS16 operating profit, before exceptional items, of £0.5m (2020: £76.6m). The pre-IFRS16 loss before tax and exceptional items was £21.3m (2020: £57.9m profit).

The board has not recommended the payment of an interim dividend.

The company opened four pubs during the first six months and sold or closed six, resulting in a trading estate of 859 pubs at the half year end.

Mr Martin said:” “Draconian restrictions, which amount to a lockdown-by-stealth, are, of course, kryptonite for hospitality, travel, leisure and many other businesses.

“The company is confident of a strong future if restrictions are avoided. The readiness of the leaders of all the UK’s main political parties to resort to lockdowns, and extreme restrictions, which were not contemplated in the UK’s 2019 plans for pandemics, is the main threat to the future of the hospitality industry, but also to the economy,” Martin opined.

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