The Wall Street Journal reports that U.K. pub group J.D. Wetherspoon PLC said consumers are facing a "bear hug" on discretionary spending power as unsustainable government tax increases and little-to-no growth in income levels combine to hit cash-strapped drinkers.
"The squeeze feels more like a bear hug at the moment. [We have seen] persistent high levels of tax increases for pubs over a number of years. [There is] a pernicious combination of increasing taxes and regulation," Chairman Tim Martin said, speaking in an interview with Dow Jones Newswires.
"We have had inflationary excise duty in March last year, the value-added-tax increase in January and another excise duty increase due [this month]. The level of tax levied at the moment and persistent increases are not sustainable," Martin added. He previously said the U.K.'s coalition government should instead encourage consumers to visit pubs and bars by decreasing the rate of VAT to a level seen in other European countries.
The industry, savaged for three years by the economic downturn and lacerated by cutthroat promotional competition by supermarkets, is concerned that rising material input costs and government austerity measures to rein in borrowing, including public spending cuts and tax hikes, will hit spending.
No comments:
Post a Comment