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Last Updated: Tuesday, 7 November 2006, 11:39 GMT
S&N warns of smoking ban effects
Man serving beer to drinkers at a bar
The smoking ban aim to protect the health of bar workers and drinkers
Scottish & Newcastle, the UK's largest brewer and maker of Kronenbourg and Foster's beers, has warned that earnings will be hit by a smoking ban.

It also said that higher raw material and energy costs would hurt profits.

The announcement comes ahead of the smoking ban that is due to start in England and Wales from 1 June 2007.

Despite the problems, the firm said it was optimistic about hitting analyst forecasts next year and was seeing good sales growth in emerging markets.

Better or worse?

Scottish & Newcastle (S&N) is among a number of firms that are benefiting from increasing demand in Asian and East European markets, where many consumers are spending more on drinks and turning from spirits to beers.

The firm also said it gained market share in the UK, though its West European market was mixed as consumer spending came under pressure.

S&N shares fell 19 pence, or 3.3%, to 549.50p in morning trade in London.

Rival pubs firm JD Wetherspoons said earlier this month that banning smoking in its pubs had actually helped its earnings growth.

It said its English and Welsh pubs that banned smoking last year saw a 2% increase in sales during the 13 weeks to the end of October from a year earlier, when smoking was allowed.

In Scotland - where a national ban has already come into force - sales at its 39 pubs were 5.2% higher than before.

Smoke-free pubs boost Wetherspoon
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15 Feb 06 |  UK Politics
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