JD warns tax rises may hit expansion

The chain, which operates some 850 pubs, is on track to open 50 sites in the year to July, but future openings may slow drastically if the Chancellor presses ahead with planned increases in duty.

Chairman Tim Martin has called on George Osborne to scrap the rises in alcohol duty, which have been going up above the rate of inflation in recent years and will wait for the Chancellor’s Budget speech before deciding whether the current rate of expansion can continue.

The chain said that like-for-like sales in the 12 weeks to January 15 increased 3.6 per cent, which was up from 1.1 per cent in the previous quarter.

However, the most recent figures were flattered by comparisons with a weaker performance in the previous December when Arctic blizzards kept people at home.

The group said its profit margins fell in the second quarter of its financial year as it struggled to pass on the rising cost of VAT, alcohol duty, and higher food and drink costs.

Mr Martin said: “If taxes continue to rise, we will have to look closely at our expansion plans.

“We are already paying too much duty and it’s not a viable proposition for the Government to punish pubs in this way. It’s driving people away from pubs and it’s bad for jobs.”