JW Lees boss: ‘Our priority is survival not growth’

The managing director of brewer JW Lees said hikes in minimum wage and National Insurance, plus proposed changes to inheritance tax, could pose an “existential threat” to the business.

Despite posting record sales, brewer JW Lees is focused on survival, with the October Budget forecast to set the family brewer back £2m per year.

The seventh generation brewer reported another record year of turnover for the year ended 31 March 2025, surging to £99.9m compared to last year’s previous record of £95.8m.

However, hiked costs mean profit before tax only ticked up by around £50,000 on the previous year, hitting £7.1m. Annual turnover rose to £99.9m (2024: £95.8m), while the group’s net assets increased to £102m (2024: £98m). 

Speaking to the drinks business, JW Lees managing director William Lees-Jones said: “The results reflect until the end of March, and like many businesses, we just got to a point where we’d got this bounce in our step back, and were looking at growth.”

Blighted by the Budget

However, he slammed chancellor Rachel Reeves’ October Budget, which is set to cost the business an extra £2m per year – almost a third of pre-tax profits.

At the time, Miles Beal, chief executive of the Wine and Spirits Trade Association, described Reeves’ Budget as a “kick in the teeth” for drinks businesses.

Lees-Jones cited the increases in National Insurance (from 13.8% to 15%) and Minimum Wage (rising to £12.21 per hour for over-21s), that came into force in April, as key challenges.

He also called on the government to axe its plans to change inheritance tax, removing the benefit of 100% Business Relief which allows family businesses to be passed down through generations sans tax.

The Manchester-based brewery was founded in 1828 by retired cotton manufacturer John Lees, and has stayed in the family ever since. Now, the business employs more than 1,690 people, and operates 43 managed pubs, inns and hotels.

Inheritance tax worries

Lees-Jones said: “Strategic planning is fundamentally how we build a strong business, and one of the biggest challenges to a family business is the ownership of it.

“Since 1979, the fact that we’ve had business property relief, meant we could pass shares from one generation to the next, effectively tax free, and that meant the focus on the business was very much about how we grow the business, how we create jobs, rather than how we can do things in a tax efficient way.”

But the proposed changes to inheritance tax, set to come into force from April 2026, would mean less money to invest in the business and create jobs, explained Lees-Jones.

“Existential threat”

“The thing that’s really frustrating is the government is just not listening, and just saying, ‘we need to pay for vital public services,’” he continued, “and you get frustrated, because when you experience public services, they tend to be pretty rubbish and lack management, lack direction.

“So at the moment, we’re just wasting quite a lot of time and money talking to advisers about how we can mitigate the risk of these sorts of taxes and how we then move forwards.

“This could present an existential threat, because who’s going to want to stay still for 16 years?”

Looking forward, Lees-Jones predicted several years of austerity and reduced risk taking. “Our priority is to survive rather than to grow,” he made clear.

Growth opportunities

On the other hand, he also believed challenging economic conditions sparked growth opportunities. “Let’s say we buy a business for £10m, and we take on £10m-worth of debt,” he said. “That makes our business look more risky and it could be a great way of reducing the value of the business as far as inheritance taxes are concerned, whilst at the same time growing the business.”

But Lees-Jones said that the brewer was not currently exchanging any contracts. 

However, it is set to relaunch its iconic Manchester beer Boddingtons back in cask for the first time since 2012 after striking a deal with the Budweiser Brewing Group.

“You never quite know when these opportunities are going to come along, and you put a plan together in terms of how you’re going to react to them,” he added.

Staycation slowdown

JW Lees pubs span Greater Manchester, Cheshire and North Wales. In its trading results, the operator revealed it had invested heavily in its existing estate and completed £11m of capital expenditure in the year (2024: £8m).

In the current year’s first 15 weeks commencing April 2025, the firm also reported robust like-for-like sales of 8.6% and overall retail growth of 17%, with invested sites showing sales growth of 32%.

Lees-Jones found the pubs’ existing customers were flocking to the firm’s hotels with “really great feedback”, which he thought confirmed “an appetite for the brand”. 

However, since the immediate post-lockdown period, he’d seen the staycations business slow down. He said the implementation of visitor levies spurred holidayers to jet to places like Spain instead.

Looking to the future

In 2023, Manchester became the first UK city to launch a tourism tax at £1 per room, and Wales has confirmed the rollout of a similar charge for 2027.

Furthermore, recruiting chefs still proved challenging, and rural destination sites had to be “really good”.

Despite challenges, Lees-Jones branded himself an optimist: “In 2028, our business is going to be 200 years old, and we’ve met many crises over the years head on.” he says. “I’m sure we’re going to get through this, but I’m just not quite sure how.”

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