Hot food tax hits rotisserie chicken sales

Sales of rotisserie chicken have been seriously affected since the government introduced VAT on hot foodstuffs in October last year.

New figures from the British Poultry Council (BPC) show that, before the introduction of the tax, around 40m rotisserie chickens were sold each year in the UK. However, in the 23 weeks since the VAT rise came into force, the BPC has said sales have fallen by around 18%, which is 3.2m fewer chickens sold over the period.

The introduction of the 20% tax on hot foods has led to the average price of a hot large plain chicken increasing by around 90p. According to the BPC, this has resulted in supermarkets selling approximately 138,000 fewer rotisserie chickens every week – around 7.2m fewer each year. The BPC also pointed out that, as a result of the tax, the Treasury has earned approximately £13.35m on sales across this period.

BPC chief executive Peter Bradnock said: “In a market where virtually all chickens sold are British, this is clearly having a detrimental effect on our farmers. We know that 70% of rotisserie customers actually consume their purchase cold, so this is unfairly penalising them. This ‘hot VAT’ isn’t raising huge sums for the Treasury but is having a major impact on hard-pressed families and British producers across the country.”

Supermarket chain Morrisons, which has been selling whole birds, both hot and cooled, since before the tax came into force, has noted a decline in sales.

Morissons’ fresh food director Jamie Winter said the company had urged the government to reconsider the “unfair tax on customers”. He explained that consumers didn’t eat the rotisserie chicken as a takeaway item and said: “Not only does it cost shoppers more, at a time when finances are already tight, there is clear evidence that the tax is also hurting British farmers. The Government should support farmers and consumers by reversing this decision once and for all.”

The March 2012 budget introduced proposals to add VAT to all produce that is sold hot, classifying it as a take-away food. To address similar anomalies created by the tax, the Treasury’s initial proposals were revised to allow hot food left on the shelf to cool down to have a 0% VAT rate.