Business rates ‘push up beer prices in Scotland’
Drinkers in Wetherspoon pubs in Scotland are paying higher prices than elsewhere because of a punitive business rates system, says the company’s chairman.
Tim Martin says business rates are supposed to be based on the value of the building, rather than the level of trade of the tenant.
Mr Martin says 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 “asssessor” in Scotland, Wetherspoon often pays far higher rates per square foot than its competitors,” he says in a note accompanying the compan’s half year results.
He says the differential is highlighted by assessments for the Omni Centre, the leisure complex in central Edinburgh, where 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, where a similar “anomaly” applies.
“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.”
Mr Martin says 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.”