JD Wetherspoon warns costs cocktail will push up prices

PUBS group JD Wetherspoon warned yesterday it would have to hike prices this year due to a "pernicious" cocktail of higher costs and taxation.

Founder and chairman Tim Martin, posting an 11 per cent slide in interim profits to 32.2 million, said all businesses were faced with rising costs on a wide variety of goods and services.

But he argued that the pubs industry had the additional burden of "a pernicious combination of increasing taxes and regulations".

Martin said: "Unfortunately, I think prices in the trade are bound to go up, which is not what customers would like to hear, I'm sure."

The group, whose estate includes about 40 pubs in Scotland, including the Playfair in Edinburgh, said in the half-year period to 23 January it had paid more than 220m in taxation.

"This and the previous government have zealously increased taxes and regulation for pubs to levels which are unsustainable. You can't treat pubs like a milk cow," Martin added.

Wetherspoon's like-for-like sales in the period rose 2.3 per cent, but growth accelerated to 2.8 per cent in the past six weeks.

Profits fell as an overall 7.6 per cent rise in revenues was offset by the higher costs and interest charges after the company rescheduled its debt last March.

Staff share 12.3m in cash and shares bonuses, of which 87 per cent were paid to pub workers. An interim dividend of 4p compares with 19p last year, when a full-year payment of 12p was supplemented by a one-off special dividend of 7p.