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Fuller's enjoys revenue boost but criticises tax burden

26 | 11 | 12

London-based pub company and brewery Fuller's has announced an impressive eight per cent jump in revenue over the 26 weeks ended 29th September 2012 but warned that the current taxation burden placed on UK hospitality businesses is unsustainable if the industry is to continue driving economic growth and creating jobs.

Adjusted profit before tax jumped by four per cent to £17.1 million over the period, with the properties acquired and fitted with kitchen equipment last year performing admirably and managed pubs and hotels delivering a strong six months, according to the firm.

Chairman Michael Turner hailed an "extraordinary" performance, noting that the Olympic period had a major effect on Fuller's income and could have an enduring role to play in raising the profile of London and helping hospitality firms based in the capital.

However, this positivity was counter-balanced when the Fuller's chief told Caterer and Hotelkeeper that current levels of beer duty are unsustainable and placing pubs in the UK at an unfair disadvantage.

"It is simply eye-watering and it is shocking when you do compare it to the likes of Amazon, eBay and Starbucks," he argued.

Fuller's claimed to have paid total taxes and other government levies of £114 million over the 12 months to September 2012, adding up to roughly 36 per cent of its total group revenue over the period.

Mr Turner suggested that the current system is especially unfair as it means successful businesses such as Fuller's are unable to engage in job creation and expansion to the degree they would wish.

"Pubs are the home of responsible drinking and beer is the most diluted form of alcohol - it just seems obscene to be taxing companies like Fuller's to kingdom come while letting other people off," he concluded.

The Fuller's chairman will find many other hospitality leaders sympathetic to his views, with campaigns such as Jacques Borel's VAT Club seeking to reduce the taxation burden facing pubs, restaurants and hotels in Britain.

A report from the British Hospitality Association (BHA) and Oxford Economics released last year suggested the hospitality industry can create 475,000 jobs by 2020 if barriers to growth are removed, arguing that the sector can be a major part of the UK's economic recovery.

Ufi Ibrahim, chief executive of the BHA, urged the government to recognise the industry's potential and help create a framework in which it can expand.

Support for a reduction in taxation levels has also come from the British Beer and Pubs Association (BBPA), which revealed this month that bars are now selling a billion fewer pints of beer per year since the introduction of the Beer Duty Escalator in 2008.

While analysts have recently stressed that it is important for pubs to concentrate on their food offering to attract a wide variety of customers, there is no doubt that high levels of taxation are having a negative impact on their profitability.

BBPA chief executive Brigid Simmonds said: "If the government wants jobs and growth in what is a key part of the economy, the Treasury must now tackle this issue."ADNFCR-16001031-ID-801494593-ADNFCR


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