The chairman of JD Wetherspoon has warned that the pub chain could be forced to switch to suppliers from outside the EU as a result of Brexit and that the strong start to its new financial year could not be sustained.
Urging EU leaders to take a “wise-up pill”, Tim Martin said any move to switch suppliers would not have adverse effects on the UK but be “highly damaging to the economy of the EU”.
Martin was an active supporter of the Brexit campaign in the run-up to last year’s referendum and used the chain’s full-year results to offer his latest views on the impact of the UK’s exit from the bloc.
“Most plcs are expected to comment, in their results statements, on the UK’s prospects outside of the EU and on the likely impact on their individual companies. It is my view that the main risk from the current Brexit negotiations is not to Wetherspoon, but to our excellent EU suppliers – and to EU economies,” said Martin, who owns 30% of the company.
He hit out against the “unelected oligarchs” with which the UK must negotiate its departure from the EU and said their posturing was encouraging importers such as Wetherspoon to look for alternative suppliers.
The chain started out with one pub in Muswell Hill, north London, in 1979 and now has nearly 1,000 outlets. Martin has previously criticised the EU and last year had said he would stop selling drinks brands from other European countries if senior EU leaders maintained a “bullying” approach to Brexit negotiations.
In his latest warning, he said any change in suppliers was “unlikely to have adverse effects on the UK economy, as companies will be able to switch to suppliers representing the 93% of the world’s population which is not in the EU, but this evolution will eventually be highly damaging to the economy of the EU”.
“Wetherspoon is extremely confident that it can switch from EU suppliers, if required, although we would be very reluctant to initiate such actions,” said Martin.
He added that EU leaders needed to take a “wise-up pill in order to avoid causing further economic damage to struggling economies like Greece, Portugal, Spain and Italy – where youth unemployment, in particular, is at epidemic levels”.
“There seems to be little genuine appetite for a free trade deal from the Brussels bureaucracy, so EU companies are, paradoxically, reliant on the goodwill of UK consumers, who are likely to prefer tariff-free goods in the future from non-EU countries, which are generally in favour of free trade, rather than deals with companies which are subject to the diktat of those who wish to punish the UK,” said Martin.
Wetherspoon’s full-year pre-tax profits rose from £80.6m to £102.8m and Martin said that since the end of the financial year on 30 July, sales had increased by 6.1%. This could not be sustained, he said.
“This is a positive start, but is for a few weeks only – and is very unlikely to continue for the rest of the year. Comparisons will become more stretching – and sales, which were very strong in the summer holidays, are likely to return to more modest levels,” he said.
To match last year’s profits, sales would need to rise by 3-4%, he said. “We will provide updates as we progress through the year. We currently anticipate a trading outcome for the current financial year in line with our expectations,” said Martin.
JD Wetherspoon shares rose by 7% in early trading.
