Young’s becomes latest pub group to hit out at Budget as it warns of £11m hit from tax rises

Pub chain Young’s expects to take an £11 million annual hit from a hike in employer taxes announced in the autumn Budget.

Chief executive Simon Dodd said the impact of a rise in employer national insurance payments, combined with an increase to the minimum wage, would result in “significant increased costs for our industry in the near term”.

He added: “We will work to see how we can mitigate these headwinds without passing on all the cost to our loyal customers.

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“We would like to see certainty and delivery of real business rate reform which will benefit all hospitality businesses”

Chancellor of the Exchequer Rachel Reeves. Picture: Danny Lawson/PA WireChancellor of the Exchequer Rachel Reeves. Picture: Danny Lawson/PA Wire
Chancellor of the Exchequer Rachel Reeves. Picture: Danny Lawson/PA Wire

Young’s joins fellow pub group JD Wetherspoon in criticising the measures, announced by Labour Chancellor Rachel Reeves, with the latter’s boss, Tim Martin, saying costs would jump “substantially” as a result.

It comes as Young’s reported higher half-year profit, helped by a bump in sales from the Euros football tournament over the summer.

Pre-tax profit for the half ending September 30 was £25.3 million, up 3.3 per cent on the same period last year, while revenue rose 27.2 per cent to £250 million.

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Mr Dodd added that the company’s recent acquisition of the 55-pub-strong City Pub Group had been successful, but that summer weather had hampered business.

He said: “I am very pleased with our performance and the progress we have made during the period, which has been achieved despite some challenges.

“The weather was frustrating yet again, with a wet spring and limited periods of prolonged sunshine during the summer months, however, Euro 2024 and England’s successful run to the final, provided a welcome boost to drink sales with our pubs performing exceptionally well on match days”.

Fellow pub group Fuller’s also revealed earlier this week that it is anticipating a a £3 million hit from additional National Insurance contributions alone as a result of the Budget.

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Chiswick-based Fuller, Smith & Turner – which has 5,500 staff – said it would need to raise prices for customers across its hotels and pubs as it faces a significant cost increase.

The group said that together with the planned increase in the minimum wage, which was also announced in the Budget, it will be facing an extra £8 million bill next year.

Simon Emeny, chief executive of Fuller’s, said: “We won’t be able to afford to just take the £8 million hit to the bottom line, so there will be price increases and it will be inflationary.”

He said it was “too early” to say what impact the Budget blow will have on the company’s investment plans, but said others in the sector were reining in spending as a result, which will lead to some hospitality firms having to cut back on recruitment.

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But Mr Emeny stressed: “Our customers want a high level of service so it’s imperative we don’t compromise on that.”

He added: “For a Government that was supposed to be stimulating economic growth, it will do the exact opposite.”

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