Pasty Tax fight continues

April 11, 2012 2:30 PM

In the latest twist to protests over the government’s pasty tax, the Chairman of the Cornish Pasty Association has stepped into the fray, saying he fears for the viability of his regional industry following the proposed 20% hike in prices in October. ‘Collectively, the Cornish pasty industry accounts as one of the largest employers in Cornwall,’ says Mark Muncey. ‘Therefore, this is going to affect a greater percentage of the Cornish economy than the rest of the country.’

‘We have seen prices throughout the supply chain going up for years,’ explained the Chairman, ‘which we, as producers, have not been able to pass on either to the outlets that sell our products or direct to the end customer. Generally, our industry has had to absorb these price increases and this means there is no room left for us to cut margins further still. From talking to our retail members, large and small, they simply cannot pass on the 20% VAT in a price increase. Many of our retail members anticipate a 15-20% reduction in retail sales and some are already talking about the need to close marginal shops, which will lead to job losses. Having spent years trying to encourage and bolster the Cornish economy via the food industry, it appears counterproductive to now introduce this tax.’

Cornish pasty makers have the support of their local MPs but they have yet to have a face-to-face meeting with the Treasury officials responsible for this announcement. ‘We don’t believe the practical implications of introducing this tax have been thought through,’ says Muncey, ‘and are disappointed that there has been no discussion with representatives of the key food sectors that will be affected.’ In the meantime, local traders are fearing the effect it will have on their business too.

‘It just seems a bit ridiculous to me,’ says a Whitsands Bay café owner in south-east Cornwall. ‘I think putting 50p on a pasty is a bit unrealistic really. In the summer we’ll sell lots and lots of pasties and as with everything else, we try and buy locally and our pasties are made locally so that could affect their trade.’ Surely, these are just the small enterprises in the private sector that the government should be helping not hindering?In the latest twist to protests over the government’s pasty tax, the Chairman of the Cornish Pasty Association has stepped into the fray, saying he fears for the viability of his regional industry following the proposed 20% hike in prices in October. ‘Collectively, the Cornish pasty industry accounts as one of the largest employers in Cornwall,’ says Mark Muncey. ‘Therefore, this is going to affect a greater percentage of the Cornish economy than the rest of the country.’

‘We have seen prices throughout the supply chain going up for years,’ explained the Chairman, ‘which we, as producers, have not been able to pass on either to the outlets that sell our products or direct to the end customer. Generally, our industry has had to absorb these price increases and this means there is no room left for us to cut margins further still. From talking to our retail members, large and small, they simply cannot pass on the 20% VAT in a price increase. Many of our retail members anticipate a 15-20% reduction in retail sales and some are already talking about the need to close marginal shops, which will lead to job losses. Having spent years trying to encourage and bolster the Cornish economy via the food industry, it appears counterproductive to now introduce this tax.’

Cornish pasty makers have the support of their local MPs but they have yet to have a face-to-face meeting with the Treasury officials responsible for this announcement. ‘We don’t believe the practical implications of introducing this tax have been thought through,’ says Muncey, ‘and are disappointed that there has been no discussion with representatives of the key food sectors that will be affected.’ In the meantime, local traders are fearing the effect it will have on their business too.

‘It just seems a bit ridiculous to me,’ says a Whitsands Bay café owner in south-east Cornwall. ‘I think putting 50p on a pasty is a bit unrealistic really. In the summer we’ll sell lots and lots of pasties and as with everything else, we try and buy locally and our pasties are made locally so that could affect their trade.’ Surely, these are just the small enterprises in the private sector that the government should be helping not hindering?

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