Wetherspoon ready to leave the EU now, says chairman

08/11/2017 - 08:42
The boss of JD Wetherspoon has said the pub company is ready to leave the European Union now with “almost no preparation required”.

Speaking as the company released its first quarter trading update, chairman, Tim Martin (left), said that statements predicting a bleak future for the foodservice industry and a rise in food costs unless a deal was struck with the EU were “untrue”.

“Statements have been made by some senior PLC directors and trade organisations which are factually incorrect and highly misleading," said Martin.

“The lowest food prices can be obtained by the UK, without the need for the agreement or consent of any third party, by avoiding a ‘transitional deal’, which would keep EU tariffs in place, and leaving the EU in March 2019.

“This would enable the UK to scrap EU food tariffs, as permitted under World Trade Organisation rules, on food imported from outside the EU. Under WTO rules, tariffs would not then be charged on imports from the EU either.

“Wetherspoon calculates that this approach would reduce the average cost of a meal by about 3.5 pence and the cost of a drink by 0.5 pence.

“The misinformation from directors and trade organisations seems to be designed to support the view that staying in the EU for an additional two years is necessary to avoid a ‘cliff edge’.

"There is no cliff edge. Wetherspoon, for example, is ready now to leave the EU, since almost no preparation is required - as is almost certainly the case for Sainsbury’s and Whitbread, and the vast majority of companies.

The Q1 trading update showed like-for-like sales up by 6.1% for the 13 weeks to 29 October 2017 versus the same period last year. Total sales increased by 4.3%.

The group’s underlying operating margin, excluding property gains, was 8.6% meaning expectations for the full year remain “unchanged”.

“Although it is only a short period, the company has had a positive start to the year,” added Martin.

“Sales have continued at a slightly higher-than-expected level since we last reported on 15 September. Costs, as many pub and restaurant companies have indicated, have been significantly higher than last year, and further increases are expected in areas including labour, business rates, utilities and sugar taxes.

“We will provide updates as we progress through the current financial year, but we currently anticipate a trading outcome for the current financial year in line with our expectations.”

The company has opened two new pubs this financial year and has sold six. It intends to open between ten and 15 pubs more this year.

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