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Pasty Tax Could See Sales Plummet

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5:23am 12th April 2012
(Updated 5:23am 12th April 2012)

Pirate FM has learnt the pasty tax could spark a twenty percent drop in sales in Cornwall.

The Cornish Pasty Association warns some producers are already thinking about shutting smaller shops and laying off staff.

It is after the Chancellor announced plans to put VAT on hot bakery food.

Mark Muncey, Chairman of the Cornish Pasty Association, said, “We are very concerned about the possible disproportionate effect the introduction of this tax will have on the Cornish economy as twice as many jobs per capita are connected with the food industry in Cornwall than the rest of the UK. Collectively, the Cornish pasty industry accounts as one of the largest employers in Cornwall 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 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."

Louise Crane sells pasties at her cafe in Whitsands Bay. She said, "It just seems a bit ridiculous to me. We'll probably have to put the cost up a little bit and try and make it up on other things. 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. If it goes up then people might think, oh I won't bother".

MPs in Cornwall are pledging to unite with others across the country to build a coalition to fight the plans.

5:23am 12th April 2012

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