The possibility that Caffe Nero, embroiled in a planning inquiry due in January over the opening of its Marlborough High Street branch, is a foreign-based firm escaping full UK taxes, was raised on radio today (Thursday).
It happened when BBC Radio Wiltshire interviewed Marlborough Transition member Richard Pitts, also a Marlborough town councillor, in a feature on the coffee shop, which opened in April without change of use planning consent.
After clashing with retail analyst Neil Saunders, also part of the debate, Mr Pitts told interviewer Mark O’Donnell: “You might want to ask Caffe Nero how much corporation tax they pay into the Chancellor of the Exchequer?
“Costa Coffee for example pay their full allocation. In terms of their community commitment they have more points in their favour than Nero do.”
O’Donnell: “Should they accept our invitation to come onto the programme and talk about this, which so far they have declined, then we will certainly ask them that question.”
“You can’t stop people buying coffee from where they want to. What is the next move then from the independent retailers in Marlborough?”
Pitts: “We must ensure that we make people aware of what they are supporting. In buying their coffee in an independent shop they are supporting a local business not a chain. And that is really important.”
“There was a survey done a few years back which showed that of every £1 spent in a local shop, 25 per cent of that pound remained in the local community. Whereas if you spend that £1 in a chain that drops to about 14 per cent.
“So by supporting your independent local retailers you are really ensuring the vibrancy of the local community and ensuring that that money stays in the area, which I think is equally important.”
He pointed out that Caffe Nero was in a prime location in the High Street, where its shopfitters moved into the premises of the clothes retailer Dash before it had even closed.
“This is a prime location on the High Street while our independent traders actually drawer people to other parts of the High Street,” he added.
“And we do actually have Costa Coffee in Marlborough. They followed the rules. They put in all their planning applications. It was done properly.”
“And the beautiful thing about their location in Marlborough is that they are in one of the more difficult shopping areas. Their sign, I’m sure, attracts people to the other shops at that end of the High Street which otherwise might not get the full attention of the shopping community.”
Later, he told Marlborough News Online that he would raise the corporation tax question with Marlborough’s MP, Claire Perry, a close friend of Chancellor George Osborne, who with other EU countries has vowed to clamp down on major companies escaping their full tax liabilities.
“The question does hit a raw nerve and we need to know the answer,” he said.
With more than 470 branches in the UK, Turkey and the United Arab Emirates, Caffe Nero is considered the third largest coffee bar chain in the country alongside Starbucks and Costa Coffee. It does claim to be British-based, but the company has not disclosed its tax payments.
An interview in This is Money last December with Caffe Nero’s entrepreneur founder Gerry Ford, who spent his childhood in California’s Silicon Valley, revealed that earnings before interest, tax and amortisation in the year to the end of May, 2011, were £30.1 million.
This was a rise from £28.7 million for the previous 12 months, with sales up by 7.7 per cent to £165.6 million, earnings having grown for 57 consecutive quarters.
Chris McHugh, a partner in Marlborough’s famed Polly Tea Rooms, who also took part in the radio programme, spoke of his anger of Caffe Nero opening a few doors away without seeking planning consent and going through the customary consultation, an attitude he called upon the company to change.
That seems unlikely since Caffe Nero has been challenged before over its retrospective planning applications and has won 16 of the 17 planning inquiries it has faced.
“It’s just the sheer arrogance of some of these big companies who feel they can just steamroller a perfectly reasonable system that works for everybody else,” protested Me McHugh.
Caffe Nero plans to submit a petition signed by 300 customers supporting its Marlborough presence at the planning inquiry, due to be held at Marlborough town hall on January 14.
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