Britain’s biggest pubs and restaurant chains have seen their share prices lift off as Rishi Sunak unveiled radical changes to the way alcoholic drinks are taxed in his autumn budget.
Hospitality and leisure businesses, such as pubs, music venues, cinemas, restaurants, hotels, theatres and gyms, will be eligible to claim a discount on their bills of 50% up to a maximum of £110k for the next year, a business tax cut worth £1.7bn.
Coupled with the business rate relief, this means 90% of all retail hospitality and leisure businesses would see a discount of at least 50%, the chancellor of the exchequer said.
While travel and hospitality companies, including Tui and IHG, saw modest gains between 1-2%, it was pub chains like JD Wetherspoons and Mitchells & Butlers which surged ahead, hopped up on major reforms to the way alcohol is taxed.
Sunak said the alcohol duty system, introduced in 1643 to pay for the Civil War, is “outdated, complex and full of historical anomalies”.
Under the new system, drinks with higher alcohol content, like whiskey and vodka, will face higher taxes, while weaker beverages, such as beer and fruit cider will see a drop in prices.
JD Wetherspoons was the second biggest riser in the FTSE All Share, with its shares up above the £10 mark. The pub operator, which has over 925 establishments, has been severely bruised during the pandemic, recording its largest annual loss ever of £154.7m in the year to the end of July.
Not far behind it was All Bar One and O’Neills owner Mitchells & Butlers and Midlands-pub chain Marstons, which each bubbled up over 4% to 257p and 81p respectively.
Young’s and Fuller’s Brewery, favourites of Nick Train, had a more muted response with the former up 1% to £15.53 and the latter falling 0.2% to 684p.
Overall, the FTSE All-Share was down 0.2% at the time of writing.
