It has survived wars, recessions and national crises, but one business is questioning its future

Laycie Beck Senior Reporter

06:00, 07 Mar 2026

Nick Peel is managing director of Stokes Tea and Coffee

The director of a popular tea and coffee company says the hospitality sector is “being suffocated” by government policy decisions.

Nick Peel, the managing director of Lincoln-based Stokes Tea and Coffee, has spoken out to reveal the current environment being experienced by independent businesses like his.

Mr Peel said that Stokes Tea and Coffee, which has been trading in coffee wholesale and hospitality since 1902, has survived wars, recessions and national crises, but is facing its sternest test right now.

The business, which currently has two cafes in Lincoln and another in Newark, Nottinghamshire, is among those being impacted by government policies – some he says have left him “questioning whether continuing to trade in hospitality makes economic sense”.

He said: “Hospitality is not failing because customers have disappeared or because operators are incompetent.

“It is being suffocated by policy decisions that remove any possibility of breaking even for these labour-intensive, bricks and mortar businesses.

“Rising wage costs, increased employer National Insurance, high business rates and extortionate energy costs have combined to create an environment that is completely unsustainable, with absolutely no sector-specific support on offer.”

Mr Peel continued: “We operate entirely by the book, and always have done. We pay our taxes. We comply with regulation, employ local people, train young staff and we support local suppliers.

“Stokes is a certified B Corp business, therefore we actively choose to operate responsibly and ethically, and we contribute significantly to Lincoln and the UK’s economy. “

He explained that for every £1 the business sells, 25 per cent of this is paid in tax to central government, with local taxes such as rates and levies on top of this.

Mr Peel said: “Instead of supporting businesses, policy does the exact opposite – for example, HMRC’s newly introduced points-based VAT system, means that fines and penalty points can be issued and remain on record for two years for those businesses that cannot quite make payments by deadline.

“There is zero flexibility offered to businesses. Zero recognition of seasonality.”

He continued: “Meanwhile, multinational corporations have historically structured their UK operations in ways that result in minimal tax contributions.

“Their tax arrangements and use of loopholes in the system have been widely reported.

“Why is the government not tackling this head on with the same urgency and inflexibility it applies to small independent operators?

“This is not a level playing field, and enough is enough.”

He explained that across Europe hospitality is supported, with Germany applying a seven per cent VAT to restaurant food, compared to nine per cent in The Netherlands and ten per cent in Italy.

Mr Peel feels the UK “is moving in the opposite direction” to this.

He continued: “If businesses that have traded for generations are questioning survival, something is fundamentally wrong with the system.

“This is not a plea for special treatment. It is a call for fairness across the industry.

“The UK cannot afford to lose its independent hospitality sector.”