Tim Martin appeals to customers on tax unfairness: JD Wetherspoon founder Tim Martin has used his quarterly column in the in-house magazine Wetherspoon News, which is circulated throughout the 860-strong estate, to explain to customers the current unfairness on tax levels in the sector. Martin wrote: “From an objective viewpoint, perhaps Wetherspoon’s greatest achievement is the amount of tax (we pay). Wetherspoon and its employees account for over half a billion pounds of taxes per year, equivalent to nearly £13,000 per week, per pub – believe it or not. In effect, about 45 per cent of the cost of every pint or meal that you buy in our pubs goes to the Treasury. No need to feel guilty about those two pints of Abbot on the way home, in that case. In fact, we pay about £11 of tax for every £1 of profit, which is nothing if not a great contribution to the economy. You would need only 1,400 companies like Wetherspoon and no other company or person would need to pay any tax whatsoever! Those 1,400 companies would cover all public expenditure on schools and hospitals - the lot. In effect, in a free country, there is an unwritten contract. As an individual or business, you are free to ply your trade, but you have to share the proceeds to pay for those services that the democratically elected government decides are appropriate. There is a danger, though, as everybody knows, including politicians, of over-promising and killing the golden goose or creating unfair taxes which penalise one type of business, while giving tax breaks to other types. In this context, I believe that pubs, which are massive generators of jobs, as well as of taxes, are unfairly treated in two respects. The first aspect is that pubs pay 20 per cent VAT in respect of food sales, as pub companies like Wetherspoon, Fuller’s, Young’s and many others have pointed out, whereas supermarkets pay no VAT on their food sales. Effectively, this is a subsidy from pubs and restaurants to supermarkets, which supermarkets have used to lower the price of their alcoholic drink sales. I think that supermarkets do a good job for their customers and don’t buy the argument that the streets are full of binge drinkers just because you can get New Zealand’s Sauvignon Blanc for seven quid at Waitrose. However, supermarkets don’t need a tax subsidy – and this tax inequality is putting huge pressure on pubs generally, causing many to close down in recent years. The second aspect of unfairness relates to the level of excise duty – the tax levied by the government on all alcoholic drink sales. With less than 20 per cent of the population of Europe, Britain pays 40 per cent of the excise duty. This is an incentive for people to load up in Calais and is a disincentive for brewers, pubs and restaurants in this country. As singer Leonard Cohen says, “Everybody talks to their pockets; Everybody wants a box of chocolates.” I’m talking to my pockets, in saying that pubs are taxed unfairly, but also to the pockets of our customers and staff, I believe. Also, if any of us is offered a ‘free’ box of chocolates from our political masters, we should always ask where they got it and who is really paying. I think that we know what the answer will be.”

Minimum price of 45p to be unveiled today: Home Secretary Theresa May is expected to use a written statement to Parliament today to unveil a ten-week consultation on a minimum price of 45p a unit for alcohol. Two-for-one deals on cheap booze in supermarkets and off-licences are expected to be ended under the plans. It is estimated that a 45p minimum price would see price rises on 52 per cent of alcohol products sold in supermarkets, off licences and convenience stores. Government sources have told The Times that supermarket “meal deals” would not be hit by the new regulations. The Daily Mail has reported this morning that pubs will get more powers to stop serving alcohol to drunks while local authorities will be able to further restrict opening and closing hours and control the density of licensed premises. A proposal to introduce a 50p minimum unit price in Scotland is currently subject to a legal challenge.

Croydon restaurants benefit from New York idea: Two Croydon businessmen, Gavin Shaw and David Pender, are applying an idea they saw in New York to the Croydon restaurant scene. They have launched the Restaurant Pack, a gift item for restaurant goers who want try out a variety of different restaurants in the area. It’s a pack of 52 cards, with each one representing and describing one of the best local restaurants in the Croydon and Purley area, as well as a few others situated just outside the town. Each card can be used to redeem a £10 discount on the first meal they have in each restaurant up until 31 December 2013.

Alistair Darby – my initial thoughts at Mitchells & Butlers: Mitchells & Butlers new chief executive Alistair Darby has offered his initial thoughts on the company eight weeks after he joined it. Darby, who was previously chief operating officer at Marston’s, reported that he had found “passionate people, great pubs, bars and restaurants and good operational disciplines”. However, he noted “solid but not spectacular like-for-like sales, inconsistent returns on capital and a sense of “positive frustration””. Darby told City analysts the key priorities for the year ahead were to expand the ways of working trial, which seeks to empower general managers and retail teams – it has been rolled out to circa 300 pubs so far. Darby also told analysts that brand development, operational excellence and a pro-active response to cost inflation would be key priorities. He also listed focus on returns on expansionary capital expenditure and the successful execution of established strategy as key. He said: “The business is populated by an incredible team of folk – the group of people running our pubs are really passionate and very capable; some of our pubs are taking £6m a year. We are running brands that score very highly with customers – you only have to see the queue of customers in a Toby Carvery on a Sunday. Our like-for-likes are solid but not spectacular – we’re not where we’d like to be in the like-for-like league table. I expect to be able to use “positive frustration” to drive the business on – we have a group of people who want the business to do better and want to be enabled to do better.” Darby said there would be no “rip-roaring strategic review”. He added: “I’ve read the last four or five strategic reviews and they all point in the direction of food. We’re on that journey – and the last thing we need is to come up with something new.” The key is to execute the food strategy with operational excellence, Darby added. Later, Darby told analysts that “capital is gold dust”, adding, “particularly in an industry with a reputation for being cavalier with capital”. “Where we are investing capital we need to be driving real value,” he added. This morning, the company reported that Darby had bought 1,084 shares in the company for 318p each while his wife Kellie Darby had bought 44,716 shares at the same price.

Propel Opinion by Paul Charity: In his first major appearance before City analysts Alistair Darby gave an assured performance. With a wealth of experience in the pub sector it was clear that he had hit the floor running with a good grasp of the key issues facing Mitchells & Butlers and the sector. He had been a little shielded by being given the shortest of the three presentation segments but then came into his own answering questions from analysts. Asked about his thoughts on brands, for example, he gave this fluent answer: “I have a marketing background and I have a pragmatic approach to brands. M&B has a number of hard brands – Toby Carvery and Harvester are examples of hard brands. It has a number of ways of operating pubs that are called brands, but are more like operating formats. Branding in pubs gets less effective the bigger the drinks mix.” It was sensible stuff, amid a welter of sensible stuff.

Mitchells & Butlers chairman argues “not enough rigour” on expansion: Mitchells & Butlers chairman Bob Ivell has told analysts that “not enough rigour” had been applied to the expansion of Mitchells & Butlers into leisure and retail parks. Ivell said some of the sites in retail and leisure parks had been found “to not necessarily have the footfall” required to achieve the right returns. Added Ivell: “If you bonus your property director on finding 50 to 100 sites, you’ll get 50 to 100 sites. If you ask for five star sites, you’ll only get five star sites brought to you.” 

Starbucks customer satisfaction scores plummet in the wake of tax controversy: Marketing magazine has reported that customer satisfaction scores at Starbucks have plummeted since it became embroiled in tax row in October. Exclusive research commissioned by Marketing magazine and carried out by social media agency Yomego, found that the popularity of the brand fell drastically from mid-October and worsened Troy Alstead, the brand’s chief financial officer, appeared alongside representatives from Amazon and Google at a House of Commons Select Committee at the start of November. “Negative conversation has indeed increased, outweighing positive discussion,” Yomego chief executive Steve Richards told the magazine. “Although Starbucks continues to attract followers on Facebook and Twitter, about 95 per cent of comments contain references to the tax issue.”

Inova Leisure to open third Bed Bar in Torquay: Inova Leisure, the operator of the Bed Bar cocktail lounge and nightclub concept with sites in Woking and Reading, is planning to open a third site in Torquay in March next year. The company operates medium-sized venues with capacity for 300 to 700 people and has grown through cashflow. It is able to open sites for a fraction of the normal cost thanks to in-house manufacturing of furnishing and equipment. Site Edibta is around 25 per cent of turnover in the region of £1m to £2m per site. Chairman Charles Johnson told Morning Briefing: “We took three years to make sure the brand values were right at our first site and we’d now like to roll the brand out. As ever, even though we’re debt free, funding is an issue and restricts our ability to develop as fast as we would like.” For Johnson’s contact details, e-mail paul.charity@propelinfo.com

Koh Thai Tapas plan third site: Restaurant group Koh Thai Tapas will launch its third restaurant in Southsea, Portsmouth. The restaurant is due to open in early December, and will be the first of a number of new sites for the growing chain. Other locations also being considered at present are Brighton, Southampton, Bath, Bristol, Winchester and Oxford, as the chain aims to open another three to five restaurants by 2014. The company opened its first restaurant in Boscombe Spa, Dorset, in 2009, followed by a second site in Bournemouth’s Soho Quarter in 2011, which won the Restaurant of the Year Award title at the Bournemouth Tourism Awards.

Molson Coors marketing boss steps down: Managing director of brands at Molson Coors, Chris McDonough, is leaving at the end of the year after a restructuring of its European business. It is combining its existing divisions in the UK and Ireland with nine Central European countries from the New Year, led by Mark Hunter, chief executive of its Central European operations and a former marketer. Andy Cray, currently director of customer marketing will become director of brands.

San Marco Group open fifth site: The family-run San Marco Group, operated by the Vragagnini family, is to open a new Italian bar in Preston. The venue, to be called Stratos, will be in the former Bistro French building on Avenham Road. It will be the fifth restaurant in the family’s portfolio, which includes Pinocchio’s in Walton-le-Dale, San Marco’s in Much Hoole and Angelos, next door to the new bar. Carlo Vragagnini, who runs the firm with his parents and three brothers, said: “We bought the building a few years ago and we thought that now was the right time to do something with it.” Vragagnini said the building will be a ‘chameleon’, serving coffee and pastries from 10am until midday, then Italian-themed tapas and sharing plates, before welcoming in the cocktail crowd with some live music.

McDonald’s launches winter TV campaign: McDonald’s has launched adverts for its Christmas menu that feature a postman braving the elements, who rewards himself at the end of the day with a McDonald’s Winter Warmer burger. McDonald’s festive menu goes on sale today (28 November) until 1 January 2013. It includes the Winter Warmer burger, Chicken Celebration burger, Cheese Melt Dippers, Orange Flavour Chocolate Pie and Quality Street Fudge McFlurry.

Oak Taverns opens Barnet brewpub this evening: Oak Taverns, led by Simon Collinson, will open its new Barnet brewpub, The Black Horse tonight, a Punch Taverns pub that’s had a £350,000 investment by owner Punch Taverns. The pub, situated on Wood Street, will have a one barrel (36 Gallons) brew plant installed specialising in one-off brews for the pub. Outside, glass doors have been installed onto the micro-brewery so customers can see inside as the beer is being brewed and tours will be offered to customers. Collinson said: “It’s a great opportunity to work with Punch. They are serious about the pub industry and by investing large amounts into their sites it shows their commitment to drive the pub, and the industry, forward.”

Britvic reports Fruit Shoot brand health metrics have recovered thanks to marketing: Britvic has reported that its Fruit Shoot brand has recovered brand equity to levels prior to its product recall in July. The soft drinks company credited its marketing team for delivering “strong” execution activity, which included a print campaign. It added “the early indicators are positive” and that brand health measures are back towards pre-recall levels. Britvic expects production to hit levels in line with historical demand by January 2013.

Gatecrasher to re-name Watford nightclub Cameo: Nightclub company Gatecrasher is to re-name its Area nightclub as Cameo when it re-opens. Last month, Gatecrasher agreed to close it for two months and rebrand to avoid losing its licence. Even though Gatecrasher has revealed the new name of the club, no official opening date is also yet to emerge.

Daniel Batham reports turnover and profit rise: Brewer and pub operator Daniel Batham has reported a sharp rise in pre-tax profit to £1,378,625 in the year to 30 June 2012, up from £970,246 the year before. Turnover rose to £5,198,435 from £4.979,960 the year before. In a very brief Companies House statement, the company added: “The group continue to modernise its brewing process in order to increase sales and provide well-maintained public houses complicit with current regulations.”

Upham Pub Company opens third site: Hamsphire-based Upham Brewery has opened its third pub – the former The Spinnaker Inn, Bridge Road, Swanick, has been re-named the Navigator after a £500,000 refurbishment. Jamie Atkinson, general manager, said: “By bringing a nice modern pub with contemporary food offerings it will give people another option in the higher end of the pub market.” Upham Brewery was set up in 2009 near Winchester. This year, a sister business, the Upham Pub Company, was launched. Its other pubs are The Winning Post, Winkfield and The Thomas Lord, West Meon, both in Hampshire.

Costa Coffee in one-day Buy One Get One Free offer: Costa Coffee is offering its customers “an early Christmas present” in the form of a “Buy One Get One Free” offer today (28 November) between 2pm and 5pm. The offer is only available on the seven Christmas drinks in its range. Costa tells customers: “We are hoping you’ll all enjoy this early Christmas present from us. Take lots and lots of pictures of your experience and upload them to our Facebook wall to be included in our Costa Moments album.”

Lucky Voice signs Argentina license agreement: The Times has reported that Lucky Voice, the karaoke operator founded by Martha Lane Fox, has made its first move overseas with the signing of a licensing agreement to open in Argentina.

Christie + Co signs German franchise agreement: Christie + Co has signed a franchise agreement with Orridge covering Germany and associated territories. The company stated: “This move augments Christie’s own stocktaking activities in continental Europe. The experienced corporate franchisee concerned will have access to the group’s comprehensive suite of technology and embedded systems. Together, our retailers benefit from a uniform pan-European service provided onsite by the relevant local nationals. The board anticipates that this first franchise agreement will make an immediate contribution to group earnings.”

Bob Ivell – customers still going out; change programme gaining traction: Mitchells & Butlers non-executive chairman Bob Ivell has told analysts that eating out has become more driven by “occasion”. He said: “Guests are still eating out but less frequently. Eating out on special occasions are more of a norm and (customers) are having that extra bottle of wine, starters and sweet - but (patterns) are a bit more unpredictable. London continues to be a market on its own. Our Castle, Nicholson’s, All Bar One and Browns sites are performing in a similar way to Fuller’s and Young’s results – there’s good growth in this market. The value end of the market is where the pressure is – it’s very price-driven and it’s where we have had to work hardest.” Ivell said the company had invested in scheduling of labour at the right times and in basic items – he reported that sales of desserts at Harvester, for example, had been affected by a shortage of crockery. The company had faced a number of problems a year ago: the guest was not the main focus, managers were drowning in administration, the acquisition programme focused on site numbers not quality, drink sales had not been a key focus and the company had an aging IT infrastructure. Ivell reported that the company organisation had been flattened, there is now clear responsibility and accountability, managers had been empowered and engaged and head office was now called the “Retail Support Centre”. The change programme has seen the company invest in front line labour and training and has seen a five point percentage increase in guest satisfaction and team engagement. A £9m investment in repairs had seen food hygiene scores rise by four percentage points to an overall 80 per cent score. Ivell added: “We’ve got a real culture change underway in the business where each person running a brand is accountable and responsible for their brand.” The culture change had been evident at the annual five-day conference in Celtic Manor where managers had shown they were more engaged in the business, Ivell said. He added: “We’ve had a resilient year, we’ve delivered good numbers, the lead indicators are encouraging and we had innovation going on with our digital marketing and information technology.”