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Last Updated: Tuesday, 16 November, 2004, 23:59 GMT
Will a smoking ban burn business?
By Clare Matheson
BBC News business reporter

Smoking cigarette on pavement
UK smokers could soon be left out in the cold
Shares in tobacco and drinks industry took a dive when the government proposed a ban on smoking in many English pubs and bars in its White Paper on Health.

But how much of an effect will a ban have on the hospitality trade?

After a year or more of bans in the Republic of Ireland, the US, Canada and Norway, to name but a few, the evidence does remain contradictory.

In the US, New York City authorities point to rising tax receipts as a sign of booming business, yet drinks giant Diageo is bemoaning a 6% drop in Guinness sales as a result of Ireland's ban.

Tobacco firm Gallaher blamed the same ban for declining "rest of world" sales - with Irish sales down 5.3% in the first five months of 2004.

Up in smoke?

Research from BDO Stoy Hayward suggested the hospitality industry will pay the price of a ban.

Business tax receipts in restaurant and bars up 8.7%
10,600 more jobs created in restaurants and bars
97% of restaurants and bars are smoke free
*Source: New York City authorities
It said that 32,000 jobs will go as customer numbers fall by 7.6%, leading to a drop in profits of more than 230m ($426m).

"Dublin alone has lost more than 2,000 jobs in a population of over one million," said Shay Bannon, business recovery and restructuring partner at BDO.

"While the loss in trade and decline in employment looks set to be lower than in Ireland and New York, it will still have an impact."

Worst hit would be the Midlands and south east of England said the study, which was carried out by the Centre for Economic and Business Research.

With cigarettes stubbed out, up to 8.2% of pub customers are expected to stay away from their local in the Midlands - where smoking in pubs is the highest in the UK.

Meanwhile, more than a third of the expected job losses will hit the South East, where 12,140 posts are expected to go up in smoke.

Trade 'to heat up'

On the other side of the fence, accountancy firm KPMG says a ban will actually boost the pub trade.

A YouGov survey of 2,100 people for KPMG, a quarter of whom were smokers, found that the key "once-a-week" pub visitors would visit their local hostelry more often in the event of a ban.

17% fall in waiter/waitress jobs, bartender numbers down 11% after the ban
33% of establishments have reported an overall decline in jobs since the ban
Two thirds of respondents say they now have fewer customers than before the ban
*SOURCE: International Communications Research
"Representing 56% of the survey base, they are the single largest group within the survey and so have the most clout," David Matthews, head of drinks at KPMG said.

"Sixty-five per cent of them are in favour of a ban and 29% believe they would visit pubs more often if a ban was introduced."

But as always, a plethora of facts and figures can cause confusion.

"Statistics and anecdotes are simply fogging the issue. For every survey or report that claims to prove the ill effects of passive smoking on bar staff, another proves the exact opposite," Caroline Nodder, editor of The Publican trade magazine warned.

That argument seems to hold water for the US model.

While the anti-tobacco lobby claimed employment, profits and licences were on the rise, the tobacco lobby provided its own stories of failing businesses, staff layoffs and fewer customers.

Smoking supporters also disputed official figures showing a rise in staff numbers across the hospitality industry, claiming that the number crunchers had wrongly included fast-food restaurants in the equation.

Ban beneficiaries

But anecdotal evidence does suggest that a number of businesses could do well out of a ban.

In Ireland, outdoor heaters and wall-mounted ashtrays are springing up outside numerous establishments to accommodate their smoking customers, sparking a boom for those industries.

Dublin cafe
Outdoor heater sales are hotting up in ban areas
Worcester-based firm Fiesta Heaters said outdoor heater sales to Ireland in the year to October had surged 178% from the year before.

"The ban has worked wonders for my trade in Ireland and I'm looking forward to it coming in over here," owner and director Mark Fletcher said.

The ban could also see more innovative ways of getting around the ban coming to prominence.

In Florida, punters had the Nicotini - a tobacco spiked martini - to take the edge off their cravings.

Meanwhile in Norway the sales of snus - a plug of snuff-style tobacco popped behind the lip - soared in the wake of a public smoking ban, with makers expecting double digit growth in the years to come.

Telegraph Nine out of 10 pubs face smoking ban - 6 hrs ago
Guardian Unlimited Reid offers blueprint for fitness - 7 hrs ago
Irish TimesBritain sets out timetable for ban on smoking - 7 hrs ago
IHT Britain cracks down on public smoking - 8 hrs ago
ABCNEWS.com Britain Plans Sweeping Smoking Ban - 13 hrs ago
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