Cigarette sales hit by ban

Smoking has been banned in pubs in Ireland since March

A leading cigarette company has revealed that its sales have fallen sharply in the Irish Republic since smoking was banned in workplaces earlier this year.

Gallaher - which makes Silk Cut and Benson & Hedges cigarettes - had reported on Wednesday that sales in the UK had risen by more than 3% since April.

The group, which has about 50% of the Irish cigarette market share, said tax increases and the smoking ban had contributed to a 7.5% fall in the total cigarette market.

This means about 260 million fewer cigarettes were sold between January and June, and experts have forecast that if this trend continued, tax returns from tobacco would fall by 81m euros this year.

Since the end of March, smoking has been illegal in workplaces, including pubs and restaurants.

The company said tobacco duty increases had "affected the affordability of tobacco products and impacted on cross-border trade".

Despite the fall in turnover, Gallaher's Irish operating profits have increased.

The company said that price increases and favourable changes to the cost structure as a result of closing a factory in west Dublin last year more than compensated for lower volumes in the reduced Irish market.

Gallaher was founded in Northern Ireland in 1840 and is one of the biggest names in the tobacco industry.

It has a cigarette factory in Ballymena, County Antrim.

Blame

Last week, drinks company Diageo said the Irish smoking ban could be to blame for a fall in the sales of Guinness.

The smoking ban means that if customers are caught smoking in pubs, restaurants and other enclosed workplaces, proprietors will now face fines of up to 3,000 euros (£2,000).

The Irish Republic's experiment with strict anti-smoking legislation has been closely followed abroad, with Norway introducing similar legislation in June.

There has been growing pressure for Northern Ireland to follow suit, while in Scotland, more than 27,000 people have responded to a government-sponsored consultation on smoking in public places.

Earlier this year, the Northern Ireland Office closed more than 140 smoking rooms in its own buildings, meaning that jails are the only government buildings in the province where smokers can light up.