‘Chicken tax’ could cost industry millions

Government plans to charge VAT on hot food have the potential to hit the British poultry industry hard, says the British Poultry Council (BPC) and supermarket chain Morrisons.

From 1 October, the treasury will charge VAT on all food kept and sold hot, making rotisserie chicken subject to the full 20% VAT rate. This could result in up to four million fewer rotisserie chickens sold, research has suggested.

A Morrisons store trialled its rotisserie chickens at the higher price, to observe how customers may react to the introduction of the tax. The chickens were sold 20% higher than normal, which meant a price increase of about 88p. The store reported a 9% drop in sales.

The supermarket and the BPC are concerned a similar drop nationally would mean about 73,000 fewer birds sold in supermarkets every week. Peter Bradnock, chief executive of the BPC, said: “This chicken tax will take £34m out of the already hard-hit pockets of shoppers wanting to buy British chicken freshly cooked in store.”

Mr Bradnock believes lost sales could amount to £17m, or nearly four million birds a year. He called this a “very high cost to consumers and chicken farmers for a relatively tiny tax gain in the government coffers”.

Jamie Winter, fresh food director at Morrisons, called the increase a “one-size-fits-all tax that will not work”. Citing the findings from the trial, he said consumers could not afford to pay any more for what was just a normal part of their weekly shop.

The original change to VAT, announced in March, covered all hot food sold, but the government watered down the proposals earlier this year after widespread protests and petitioning over what opponents called the “pasty tax”.

Cooked food sold after being kept warm will be subject to the increase, but food that is cooked and allowed to cool, such as pasties and pies, will escape the extra tax.

Tony O’Niell, director at Moy Park, said rotisserie chicken is “not eaten as a take-away meal – rather, it is the centrepiece of a family dinner – it is only fair that the government makes it exempt from this tax”.

The BPC and Morrisons have joined forces to launch a campaign called “Don’t Tax Our Roast”. People can sign a nationwide petition or text CHICKEN and their full name to 88802 (texts charge at standard network rates).