Is the Nanny State Squeezing the Life Out of UK Restaurants?

Henry Birts, Chief Executive of Wasabi, has voiced serious concerns over what he sees as the escalating burden of government intervention in the UK’s restaurant trade. In comments made to The Telegraph, Birts warned that Labour’s proposed public health regulations could drive a critical sector of the British economy into decline.

Speaking out against Sir Keir Starmer’s plans to impose calorie-reduction targets on large restaurant and fast-food chains, Birts stressed that these “nanny state” policies—when combined with rising taxes and operating costs—pose an existential threat to restaurants already operating on razor-thin margins.

“We’re at risk of really killing the industry if we continue to regulate and regulate and put the costs up,” said Birts. “All of this together is having a collective effect that is just not helpful.”

‘Shooting Ourselves in the Foot’

While Birts acknowledged the importance of promoting public health, he cautioned against an overzealous approach to regulation. He emphasised that government pressure, without consideration for commercial realities, could backfire economically.

“I’m a big believer that our industry needs to continue to be responsible around health,” he said. “But if the Government continues to tax and regulate their way through all of this, there’s a line where it becomes very unhelpful, and we end up shooting ourselves in the foot.”

Though exact details of Labour’s restaurant calorie targets remain unclear, they are expected to mirror new supermarket regulations that mandate reducing calories in consumer baskets—a policy heralded as a key weapon in the fight against obesity.

Obesity and NHS Pressures

Obesity rates in the UK have doubled since the 1990s. Health Secretary Wes Streeting has warned that the NHS may become “unsustainable” unless this trend is reversed. The proposed measures form part of a broader strategy to mitigate long-term health and fiscal pressures.

Yet, businesses argue that now is not the time to add compliance costs, particularly as they grapple with an unpredictable post-pandemic economy and wavering consumer confidence.

Tax Shock: The NI Burden

Birts also criticised the recent increase in National Insurance (NI) rates for employers, introduced by Chancellor Rachel Reeves, describing it as both sudden and poorly conceived.

“The NI rise was unexpected, and it felt as though it was not particularly well planned or thought through,” Birts said. “On a macro basis, it’s completely against the so-called ‘growth agenda’ that the Government talked about.”

The financial impact on Wasabi alone is expected to reach seven figures. Birts warned that the ripple effects will be felt industry-wide, with higher menu prices, upward pressure on inflation, and employers becoming more hesitant to recruit.

Wasabi’s Resilience and Future Growth

Despite the mounting pressures, Wasabi continues to trade robustly. The chain, founded in 2003 by Korean restaurateur Dong Hyuk Kim, operates 40 sites in London, six outside the capital, and four in New York. Its product line of ready meals is also sold in major UK supermarkets.

In 2023, the business reported revenues exceeding £100 million. Recent milestones include the opening of its first airport location at Luton, signalling continued expansion across the UK and the US.

However, Birts noted that customer behaviour in London has shifted, with footfall still varying widely by location compared to pre-pandemic patterns.

“We used to be a five-day-a-week business,” he remarked, hinting at ongoing challenges in city-centre recovery.