Tourist tax is hurting Britain, Mulberry boss warns as shoppers flock to Paris and Milan
The Mulberry boss has warned that the abolition of duty-free shopping for foreign visitors is harmful to Britain and good for Europe.
Thierry Andretta said businesses in the UK are suffering from the massive influx of wealthy American and Middle Eastern tourists to the mainland for shopping.
The comments came after Rishi Sunak and Jeremy Hunt scrapped VAT-free shopping, allowing foreign visitors to claim back 20 percent of their purchases.
While countries in Europe charge VAT, they also offer a refund for foreign visitors who take purchases home.
There is a growing unease that the loss of Britain’s tax break is a major own-goal, with the so-called tourist tax hitting the UK economy while boosting sales in Paris, Milan and beyond.
Iconic: Model Alexa Chung (pictured) designed a range of Mulberry handbags. But the luxury company says Britain is taking the brunt of its so-called tourist tax
Announcing an otherwise optimistic set of results yesterday, Andretta said: ‘British brands, British luxury, British retail and British hospitality are all suffering from the lack of duty-free shopping in the UK for tourists, to the benefit of our European counterparts.
“We urge the government to look at the contribution of the luxury sector to the wider UK economy and to reconsider its position on duty-free shopping for tourists as a priority.
“If we want British brands to invest, grow and create more jobs, we need a level playing field with Europe.”
The brand closed its flagship Bond Street store in February, citing lackluster tourist numbers after the government halted its VAT-free shopping programme.
But it has become the latest luxury brand to cash in on the enthusiasm for expensive handbags.
Business was better than expected thanks to increases in the UK and China, despite a ‘challenging’ economic landscape.
Wealthy shoppers started looking for handbags like the Alexa bag, which costs £1,250. The fashion houses LVMH and Hermes also experienced stormy sales.
Group sales were “slightly higher than last year,” boosted by “an improving climate” in China, thanks to the shredding of Covid curbs last year, the London-listed company said.
Asian shoppers are particularly interested in buying small bags, which retail for hundreds of pounds.
A new quilted Softie bag, priced at a whopping £1,750, was ‘a special prize’ among Chinese shoppers, according to retail analyst Wizz Selvey.
Chinese consumers “like to parade luxury British and European brands, whose main products are accessories, particularly handbags,” which makes money from brands such as Mulberry and Hermes, Selvey added.