Tim Martin, the CEO of JD Wetherspoon, has announced plans to minimize price increases for the chain’s pubs amidst rising costs attributed to a new packaging tax and escalating energy bills. The recently implemented extended producer responsibility levy on packaging is expected to increase the company’s annual costs from £800,000 to £2.4 million. Martin noted that suppliers are passing on their packaging costs, which include items like bottles and cans.
He also highlighted the impact of increased non-commodity energy costs, which he claims will add approximately £7 million annually due to additional levies aimed at funding nuclear power station construction and supporting energy-intensive industries. The consultancy Cornwall Insight recently projected that the new nuclear regulated asset base (RAB) levy, expected to be introduced in early next year, would result in an annual increase of almost £10 for consumer energy bills.
Martin emphasized that non-commodity costs would constitute 62% of Wetherspoon’s total electricity expenses. The company has already faced a £60 million annual increase due to rising employer national insurance contributions and minimum wage hikes. Other leaders in the hospitality sector, including Jonathan Neame, CEO of Shepherd Neame, have expressed similar concerns about government-imposed cost increases.
Despite these challenges, Wetherspoon reported a 5.1% annual increase in sales at established pubs, totaling £2.1 billion for the year ending July 27. Pre-tax profits rose by 10.1%, reaching £81.4 million. Martin indicated that while the company anticipates a reasonable financial outcome, government-related cost increases could influence results.
As JD Wetherspoon prepares for potential tax changes in the upcoming budget, early trading saw a more than 5% decline in its shares due to a reported slowdown in sales at the start of the new financial year. Comparable sales showed a 3.7% increase for the nine weeks ending September 28, though this was slower than last year’s growth rate. Analysts note that despite recovering revenues, increased costs related to energy and wages could impact profit margins and overall business outlook, with the prevailing economic conditions in the UK adding an additional layer of uncertainty.
Source: https://www.theguardian.com/business/2025/oct/03/wetherspoons-price-rises-energy-bills-packaging-tax-tim-martin