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‘It’s not the job of businesses to solve global problems’ says Mangrove MD

Published:  30 June, 2022

A new taxpayer-funded ad campaign will ask businesses to cut prices to help with the cost-of-living crisis from July.

The government has yet to come up with an official slogan for the campaign and sources have told the BBC that businesses will not be receiving any subsidies or funding in order to cut prices.

Responding to the reports, the Federation of Small Businesses said asking companies to, “soak up additional costs just isn’t realistic.”

Martin McTague, national chair of the FSB told the BBC that most small firms are "well beyond the point of being able to absorb extra costs without passing them on, which is often a last resort".

Inflation is currently at 9.1%, the highest rate since March 1982, with many consumers cutting back on food and drink as a result.

Nick Gillett, MD for Mangrove UK said: “The current government has almost zero idea about the issues facing the hospitality businesses and zero ideas of how to help.

“I would be amazed if operators can hold current pricing let alone reduce them and why should they? It isn’t the job of business or individual operators to solve global problems.”

He added: “Quality food and drink costs money to produce as do sites to own and operate. Others might make the argument that we should be paying more to farmers rather than offering discounts to consumers. Tactical discounting to fill venues and tables is a legitimate marketing strategy. Enforced discounting by government decree or request is a nonsense.”

Gillett suggested five ways the government might want to consider to truly lower prices:

  • Reducing duty on alcohol and fuel

  • Reduce the VAT on the duty or on the sales

  • Look at rates or energy support for licensed premises

  • Relax the supply of labour constraints to allow us to recruit

  • ... or any other of the practical ideas they can control