Mulberry Chief Urges Labour to Scrap UK Tourist Tax Amid Luxury Spending Slump

The chief executive of Mulberry, Andrea Baldo, has sounded the alarm over what he describes as an “unfair” tax burden that is hampering Britain’s prospects, as the luxury sector contends with a pronounced decline in spending by affluent global visitors. Baldo has called on Labour to reconsider the so-called tourist tax, arguing that reintroducing VATfree shopping for overseas travellers could stimulate economic growth and reinvigorate the struggling luxury market.

Baldo contends that reinstating VATfree incentives would encourage investment in UK manufacturing, supporting luxury producers such as Mulberry. He also suggests that a reversal of the tax would boost related sectors including hospitality and the high street, while restoring the competitiveness of British retailers relative to their European counterparts. Data from Global Blue illustrates the extent of the problem spending by nonEU tourists in Britain remains at only 75 percent of preCovid levels, whereas countries like Spain and France are experiencing dramatic increases of 166 percent and 159 percent respectively.

The pressure is mounting on the government to stimulate growth after the Office for Budget Responsibility announced a significant shortfall in the Chancellor’s plans due to weak productivity, creating a gap of as much as £27bn. Baldo insists that offering tax relief to international shoppers is a matter of global competition rather than domestic politics, highlighting that visitors to Paris and Rome can currently reclaim VAT, placing the UK at a disadvantage. Since the end of VATfree shopping in 2021, Mulberry estimates a loss of nearly £10m in UK sales, a setback the company attributes to reduced international footfall.

Baldo notes that international visitor traffic in London has dropped by roughly a fifth since the pandemic, directly impacting store revenues. In contrast, Mulberry’s outlets in Dublin and Amsterdam have seen business from travellers nearly double. The chief executive describes the policy change as devastating for the brand, both in lost sales and diminished global appeal.

Upon joining Mulberry last year, Baldo faced internal challenges alongside the external tax issue, acting as intermediary between major shareholders Ong Beng Seng and Mike Ashley’s Frasers Group. Relations have since improved, with Frasers gaining a place on Mulberry’s board and both shareholders backing a £20m capital raise. Mulberry now features in 15 Flannels shops alongside Selfridges and John Lewis, with plans to expand standalone store locations across the UK as part of a renewed focus on the domestic market.

Mulberry is drawing on its heritage and product innovation to regain relevance among British consumers, seeking to rekindle the brand’s appeal that once made its bags musthave accessories. New launches and revisits of classic designs, such as the Roxanne bag, have begun to revive sales, notably a 16 percent increase at the Regent Street location this year. Baldo remains optimistic about Mulberry’s turnaround prospects, though he acknowledges the need for economic policies that bolster rather than undermine consumer confidence. Abolishing the tourist tax, he suggests, would be a welcome boost for the brand and the broader retail landscape.