Nick Gillett: ‘Our glasses are almost empty’
The managing director of Mangrove Global, Nick Gillett, believes the past few years have been the “bleakest” he has ever faced in the industry, and anticipates the impending Budget will not support hospitality in the way it needs.
Gillett expressed his views in a letter to the UK chancellor ahead of the autumn Budget on 26 November.
believes the past few years have been the “bleakest” he has ever faced in the industry, and anticipates the impending Budget will not support hospitality in the way it needs.
Among his requests for a “picture of utopia” for hospitality, he lists the fixing of alcohol duty, higher business rates relief and lower VAT.
He is among many calling for the scrapping of alcohol tax rises, including the Wine and Spirit Trade Association (WSTA) and the Scotch Whisky Association (SWA).
Gillett has previously spoken on The Spirits Business Podcast about the current state of the industry and where governmental change could have a positive impact.
The full letter is available to read below.
“Dear chancellor,
“I’ve been in the spirits business for the majority of my life. In the early days, I sold bottles of wine to bars in London and, with a bit of hard work and luck, I’m now the MD of a spirits distribution company. But in my 30 years in the industry, these past few years have been the bleakest by far. In advance of what I expect to be another budget that’s bad for hospitality, I implore you to listen to an industry that’s shouting for support – that’s at the end of its tether, and is tired of being a target.
“The UK government (in all its colours and political persuasions) has been punishing spirits and hospitality for years now. All businesses are struggling with the policy-induced high cost of employment, energy prices, and inflation, but we’re also being piled upon with the alcohol duty escalator and the ending of post-Covid rates relief. We’re losing one hospitality venue a day in this country – and behind each of those is a business owner and their family who have poured effort into an enterprise that helps our economy, but who you firmly turned your back on.
“While you give high-tech startups ample tax breaks (whether or not they ever generate a profit or bring anything to the economy), independently run enterprises that do generate profit are penalised. Our industry is built upon entrepreneurs, but there’s no incentive to start a business any more; you’ll be taxed to the hilt, stressed by an increasingly complex regulatory landscape, and if you do manage to build something special, you can’t even pass that business on to your kids without them losing half of it to inheritance tax.
“I’ve said it before – hospitality really can be the UK economy’s golden goose. If treated right, we offer abundant employment opportunities and upskilling; we generate profit at every point of our lengthy supply chain, right back to the farmers who grow the raw ingredients in our booze. We are a cheat code for economic growth, but one being strangled by a government that claims that growth is the strategy, only to then act oppositely.
“Increasing wages to a better standard; looking after the NHS and education; driving forward a green agenda – these are all so important. But you need the engine of successful business to generate the money to invest in these priorities.
“My ask is neither small nor simple. But if I paint a picture of utopia, maybe you’ll grant us a few smaller adjustments at the very least. You need to recreate a low tax environment that rewards risk. Scrap the alcohol duty escalator and fix it somewhere for at least a few years. Bring back a higher business rates relief and reduce VAT for hospitality venues. Give us some certainty and let businesses plan beyond the next budget. And make a bigger, more sweeping tax change that affects all industries, instead of unfairly punishing ours. Above all else, encourage the public to get back out onto the high street and into their local venue.
“Long term, we’ll survive, but we’ve already lost so many great operators. And that’s largely thanks to governments that have been bad for business. Maybe we need to be louder, more vocal, and advocate for our cause that seems often neglected. Or maybe you need to stop consulting the conglomerates of our industry, and instead listen to the independent businesses that line British high streets, and distil our booze.
“We are an industry full of hard workers and creative spirits. We’ve never shied away from all that we do to line the government purse, but our glasses are almost empty and you’ve taken too much. Before you publish another Budget, consider what our towns and cities look like without a thriving hospitality scene; consider what our local economies and your tax income will look like if we fail. We’re at the end of our tether, and you’re the only person with the power to act.
“I wait with baited breath for 26 November.”
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