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Mon 8th Oct 2018 - Update: Sector demands digital services tax, Pret, Easyhotel, Shepherd Neame, pub closures
Sector bosses demand digital services tax to fund business rates freeze amid pub and dining ‘crisis’: A coalition of Britain’s biggest restaurant and pub owners has urged the chancellor to tackle the “crisis in hospitality and the high street” with “root-and-branch reform” of the tax system, including a freeze on business rates and a levy on technology giants. In a letter to Philip Hammond, companies including Stonegate Pub Company, PizzaExpress and Wagamama have called for a tax on internet giants to be included in his Budget. The businesses said the proceeds of a levy on Google and Facebook should be used to fund a freeze on business rate increases to ease the pressure on bricks-and-mortar outlets, reports The Daily Telegraph. The chancellor raised the prospect of a “digital services tax” at last week’s Conservative Party Conference. Stonegate chairman Ian Payne attacked the “inequality” of the tax regime. He said his company pays “20 times greater than the amount of tax that Amazon paid, and yet our turnover was around a third of Amazon’s”. The hospitality sector employs about one in ten of the UK workforce and generates £130bn of economic activity, ­according to UKHospitality, which wrote the letter to Hammond. But the rate of pub and restaurant closures has doubled since April, it said, adding eight outlets a day have been shut over the last year. Brewer and retailer Greene King, Merlin Entertainments and holiday park Butlins are also among the 32 co-signatories. Keith Knowles, chief executive of pan-European hostel and bar company Beds and Bars, said the government needs “to decide if it wants to create the environment for recession or an environment for stability and growth”. Business secretary Greg Clark raised hopes change was afoot during a fringe event at the Conservative Party Conference. Recognising the pressure on the high street, he mooted adjusting business rates. Hammond later pleased campaigners for digital tax, by telling the conference internet giants should “contribute to funding public services”. The letter from the hospitality sector called for “a grown-up partnership with government”. Other demands include increasing the threshold for employer National Insurance Contributions, handing the independent Low Pay Commission greater powers to set the National Living Wage and launching a VAT review similar to that recently issued in ­Northern Ireland. 

Pret supplier claims contamination claims are ‘unfounded’: CoYo, the vegan food company that allegedly supplied a contaminated coconut yoghurt blamed by Pret A Manger for the death of a second customer, this time in Bath, has said allegations made by Pret are “unfounded”. Tate & Lyle was also pulled into the row after being identified as a supplier involved in a recall by CoYo. A Pret customer died in December last year after eating a “super-veg rainbow flatbread” bought from one of its shops in Bath, Somerset. The sandwich in Bath was advertised as being dairy-free but Pret said the ingredients contained milk protein that caused an allergic reaction in the victim. Pret said the milk was present in the coconut yoghurt, which it had been “mis-sold” by the owners of the CoYo brand. It is taking legal action against the supplier and said it had conducted tests on the produce. “This is believed to have resulted in the tragic death of a customer from an allergic reaction,” Pret said. CoYo yoghurts were recalled in February this year after a milk contamination was discovered. The Food Standards Agency advised customers not to eat the yoghurt. However, CoYo, which makes the yoghurt in a dairy-free factory in Erith, Kent, denied it supplied contaminated material to Pret as the recall related only to raw material it used from a third-party supplier from January. “The claims made by Pret are unfounded,” it said. CoYo no longer works with the supplier and said it has since tightened its controls. The supplier involved was Tate & Lyle, according to the Financial Times (FT). The contamination was allegedly in the form of a starch used by CoYo in its yoghurts supplied to Pret. A spokesman for Tate & Lyle told the FT: “We confirm we have been a supplier to this organisation. There is no further information we can provide. Our thoughts are with the family involved in this tragic matter.” A coroner’s investigation has yet to take place as Bath and North East Somerset Council is still investigating the death. No official cause of death has been given.

Easyhotel reports ‘transformational year’: Easyhotel, the owner, developer and operator of “super budget” branded hotels, has reported a transformational year, delivering 42% increase in the group’s room portfolio and accelerated pipeline growth. The end-of-year trading update announced total system sales up 25% to £37.2m (20 September 2017: £29.7m). Owned hotels saw revpar up 11% and like-for-like revenue for franchised hotels increased by 12%. Chief executive Guy Parsons said: “While we are mindful of the current economic uncertainty facing the UK, our simple, stylish and highly affordable customer proposition resonates well with today’s cost-conscious traveller and has underpinned strong revpar growth over the period. The team has worked hard to deliver on an ambitious opening programme across the UK and Europe, which has seen the number of owned hotels in our portfolio double over the course of the financial year and our network of rooms across the UK and Europe increase by 42%, including the opening of Easyhotel Barcelona, our first owned hotel in continental Europe. The successful placing completed in March 2018 has enabled us to accelerate our growth plans. We are focused on expanding our developments as well as balancing our strong UK pipeline with a growing number of exciting European opportunities, creating value for our shareholders and underpinning the long-term growth of the brand.” The group expects to announce its final results for the year ended 30 September on 6 December.

Shepherd Neame confirms acquisition of Ebbsfleet Garden City site: Shepherd Neame has confirmed the acquisition of a site at Ebbsfleet Garden City, a major strategic development bordering Greater London and Kent. Ebbsfleet Garden City is the largest housing, employment and infrastructure project in the south east and will see the delivery of 15,000 new homes within the next ten years. The development is next to Bluewater shopping centre and “capitalises” on the transport links afforded by Ebbsfleet International Station, the nearby M2 and the proposed Crossrail extension. Shepherd Neame will build a landmark pub hotel on the site with 17 bedrooms and a 150-cover restaurant and function suite. The new pub will be located at Castle Hill in the centre of the Eastern Quarry sector of Ebbsfleet Garden City. Once open the new pub hotel will bring the total number of bedrooms across Shepherd Neame’s estate to 311. Chief executive Jonathan Neame said: “This is an exciting project at the heart of a major development in north Kent at the strategic crossroads between London and the Garden of England. This fits perfectly with our programme of investment in our pub and hotel estate, providing a great drinking and dining experience and high-quality accommodation for our customers in unique and interesting locations.” Construction is expected to start in late 2019, ready for opening mid 2020.

The Times – rising costs have led to an acceleration in pub closures: The Times has reported an acceleration in pub closures because of rising costs. The newspaper stated: “According to analysis of government data by Altus Group, the property adviser, 33 pubs a week closed in the six months to the end of September, up from 25 a week for the previous 12 months. It found 875 pubs had ‘gone forever’ since the beginning of April, compared with 1,292 the previous year. As well as higher business rates, pubs have been hit by rising labour, energy and food and drink costs while beer duty rates are among the highest in the EU.”

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