After the smoking ban - the bars that emptied
23/08/2007
Almost two months after the smoking ban came into force, Neil Tweedie reports on how the traditional pub has been changed for ever
You can still sit at the bar and smoke at The Cricketers in Badshot Lea. The only difference is that the bar is two-dimensional, painted on an outside wall to provide regulars with a comforting reminder of a now departed world. There, the smokers must spend their evenings, perched on stools, condemned to an all-weather al fresco existence by the ban on smoking in public places.
It's bingo night at the Surrey hostelry, with £11 at stake for a full house. Every so often the caller pauses and the drinkers rush outside to the plastic-covered space behind the pub for a gasper. There, others sit, puffing away at garden tables, warmed by an enormous gas-fuelled patio heater.
The smoking ban in England and Wales is less than two months old. On July 1 a timeless national tradition, the leisurely taking of tobacco over a pint under a solid roof, went up in smoke. Get caught having a naughty drag in a bar and you can be fined £50 on the spot. For the landlord or landlady it can be far worse: a maximum £2,500 fine, possible revocation of licence and a criminal record.
The effects of the ban have yet to be fully felt. Many pubs, particularly those orientated towards food and families, appear to have survived unscathed, or even thrived. But among the owners of more traditional pubs - the old-fashioned boozers with their smoking rooms, snugs and vaults - there is real pain. Some observers of the industry believe hundreds, possibly thousands, of public houses will shut over the next few years as drinking habits change under the weight of the ban.
Barbara Barns, landlady of The Cricketers, does not intend her establishment to be one of them. She has done everything possible to sustain her trade, from investing in a pleasant little beer garden at the rear to providing courtesy coats and fleeces when the temperature falls.
She hates the ban, though. A smoker herself, she views it as a straightforward invasion of privacy, an example of an increasingly prescriptive society and a rule-obsessed state.
"That is my home in there and I have to come outside to smoke," she says, drawing on a cigarette outside. "It doesn't matter if I've shut up shop, I still have to come out to smoke. One day, this government will be responsible for giving me pneumonia - in and out, in and out, from the warm to the cold, from the cold to the warm, all day long."
The smoking ban has already produced some surprising consequences. Take smells. Tobacco smoke may have been unpleasant but it masked a myriad odours. Since the ban, hundreds of pubs have been forced to steam-clean carpets stiff with years of beer spillage and other deposits. Nightclubs are now pumping perfume into their air-conditioning systems to mask the body odour given off by dancers.
"It's not just beer spill," says Caroline Nodder, editor of The Publican. "Some regulars have been discovered to be not the most fragrant of people.
"There's been a big effort to freshen up pubs, with new carpeting and decorating. The tragedy for some was that the work was almost immediately undone by the floods."
An undoubted beneficiary of the ban has been what is known as the "shelter industry". Websites offer a range of products promising a modicum of protection against the elements. A deluxe smoking shelter can cost £5,000, a wall-mounted smoking bin £70.
Then there are children. The interiors of pubs may now be more welcoming, but not necessarily the exteriors. In pre-ban days, families sat in the open at the back of The Cricketers. But the smokers are there now, so parents keep their children inside.
There is a topsy-turvy feeling to many British pubs today, with scores of people crowding outside while bar rooms lie empty - even in cool weather.
"It's made me more determined to smoke," says Ali Van Pelt, one of The Cricketers' regulars. "We are being treated like pariahs."
Her husband Nick had given up but started smoking again after he found himself spending sitting outside with the smokers all night.
"I wouldn't smoke in a restaurant, or around kids, but this is stupid. Pubs should have been given a choice as to whether they went non-smoking or not, or been allowed a smoking room."
A klaxon breaks the evening quiet. Mrs Barns keeps it behind the bar as a light-hearted deterrent against any customer thinking of lighting up inside.
There are some 50,000 pubs in England and Wales. Experience from Scotland, where smoking in public places was banned last year, suggests takings from alcohol sales will suffer, at least initially. The Scottish Licensed Trade Association cited a 15 per cent drop.
In Ireland, which pioneered the smoking ban, the effects were far worse. Hundreds of pubs closed, particularly in rural areas. Melanie Haynes, spokesman for the publicans' professional body, the BII, believes that experience will not be repeated in England and Wales.
"Ireland was heavily over-pubbed," she says. "In Scotland, pubs that were 'landlocked' - with no space in front or behind to accommodate a smoking area - suffered most. As far as England was concerned, we had more time to prepare. The landlords who took the trouble to find out what their customers wanted before the ban, and invested in facilities for smokers, did best.
"On the whole, members we have spoken to have given a positive response. There is some concern that people are going home earlier than they would."
The big pub chain owners have been coy about the effects of the ban. Takings affect the value of properties and no company is going to trumpet falling sales. Punch Taverns and Enterprise Inns, which dominate the industry, refused to release figures. Enterprise said it was impossible to separate the effect of the ban from the bad weather in July, which had driven away customers.
Punch was equally obscure, saying: "It is far too early to tell what impact the smoking ban has had. However, we believe in the long term the smoking ban will have a positive impact on our industry as non-smokers and families return to pubs as part of their leisure activity. The onus is on the publicans and pub companies to make their businesses welcoming."
Research carried out in the first week of the ban, involving a sample of 1,500 pubs across England, suggested a fall in takings of just 1.3 per cent. However, some suffered more than others.
Andrew Pring, the editor of pub trade newspaper the Morning Advertiser, believes there are likely to be a considerable number of closures over coming years.
"Of the 50,000 pubs in England and Wales, between 5,000 and 8,000 are traditional boozers that rely on alcohol sales rather than food. There's bound to be a shake-out and a couple of thousand may go. Overall, though, the industry will survive. It's amazingly resilient."
Some pubs have gone already. Deejay Royall spent thousands of pounds transforming the interior of The Bush, in Wigan. He decided to pre-empt the ban and steal a march on rivals by prohibiting smoking from February. The result was a catastrophic fall in customers.
"People started to go to other pubs that hadn't introduced the smoking ban, and then, when it came in last month, they stopped going out altogether. They are staying at home, buying cheap booze from the supermarkets and sitting in with their friends, smoking their heads off."
Paul Jones, the landlord of the New Inn in Lower Cwmtwrch, in south Wales is another victim. "I've sold my lease because I can't continue," he laments. "About 40 per cent of our trade was cut by the smoking ban."
Mr Pring also believes in the supermarket phenomenon, but thinks it will not last.
"You probably will see a lot of lower-earning people who frequented the traditional pubs buying drink from Tesco and smoking at home, but eventually they'll get bored and want to go out. There's far more to a pub than just smoking and drinking. People go there to escape home and to mix."
The tendency for pub-goers to spill into the streets is beginning to make itself felt in complaints from householders. In Coventry, 50 residents have signed a petition against a pub's application for an awning to protect drinkers from the rain. The management of The Cedars wants to install the shelter at the front of the building, but objectors say it will encourage even noisier gatherings.
Devon and Cornwall police have meanwhile threatened to shut down pubs that fail to control customers drinking in the open air. It follows the blocking of roads by crowds of drinkers and threats to motorists trying to drive through them.
Unless smoking in the open air is banned, Britain had better get used to night-time crowds. Terry Archer, the manager of the Lamb and Flag in London's Covent Garden, has no option but to let his customers drink on the street. The pub, a haunt of the poet Dryden and once known as the Bucket of Blood for its bare-knuckle fights, is completely landlocked and can provide only a ledge outside its front window. A traditional drinking pub, it always had a lot of smokers.
To placate Westminster city council, Mr Archer has roped off the pavement outside to ensure drinkers do not obstruct passers-by.
"There are good things about the ban," he says. "We get more female customers, and more tourists - Americans are very health-conscious and don't like a smoky atmosphere. But something's been lost as well; conversations tend to get interrupted because someone gets up and goes for a cigarette. If it was a choice between giving up serving food and giving up smoking, I'd rather keep the smoking."
There are those, even now, who are seeking to overturn the ban. Hugh Howitt, who runs the Happy Scots bar in Blackpool, became the first person in England to be prosecuted for violating it. A month after the ban was implemented, he was in court, where he pleaded not guilty to 12 counts of failing to stop people smoking in his pub.
The publican, who is known to his regulars at Hamish, promised to fight the prosecution all the way to the European Court of Human Rights, accusing Blackpool council, which must enforce the legislation, of being vindictive.
"When MPs voted to bring in this ban, they voted in a wave of emotion, not common sense," he said.
Mr Howitt's chances of success must be judged as slim - and, if found guilty, he faces a possible fine of £30,000. A month into the new era, the smoking pub-goers of England and Wales appear resigned to their fate.
The Government has given local authorities £29.5 million to enforce the ban. In London, some 6,000 visits are said to have been made to pubs and clubs by enforcement officers, resulting in only 13 cases of people being caught smoking.
Critics of the ban will argue that officials are trying to create a picture of compliance to entrench acceptance of it. Landlords, who have much more to lose than their customers, are likely to police it themselves.
"We will have no truck with anyone lighting up here," says Mr Archer. "Whether we like it or not, it is the law."
As for the economic effects of the ban, Mr Pring thinks the winter will be crucial for some pubs.
"People stand outside in the summer, so we haven't really witnessed the full effect of the ban yet," he says. "Whether people are going to be prepared to freeze outside for the sake of a smoke, we'll see."
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Ban causes 'havoc' on the street
Shop keepers and residents say they are desperate to move out of a street because of the havoc the smoking ban has caused.
Since the legislation came in, locals say Bemisters Lane, Gosport, has been full of drunk people spilling out of the George and Dragon pub for a smoke.
In the weeks following the ban, residents, shop owners and passers-by claim they have been plagued with problems.
The situation has become so bad one shop is looking to sell up and move out and two council residents have pleaded to be re-housed.
They claim the quaint lane has suffered:
Groups of threatening drinkers outside in the narrow lane
Constant noise until the pub's closing time
Smashed windows
Hundreds of cigarette butts left on the floor
Fights in the street.
Mary Bartlett, owner of Barnet's hair and beauty, opposite the pub, said: 'Since the introduction of the smoking ban I have personally suffered verbal intimidation and abuse.
'My staff and clients have listened to foul language from the pub customers, smoking under the awning.
'I can't stand it any more. I'm thinking of selling up and moving out.'
Resident Richard Blatch, 58, has asked the council if he can be re-housed.
He said: 'It's got worse because now they all congregate outside.
'Last Friday night we had to phone the police because of a fight and we had to do the same again on Saturday.
'We've requested to be moved away anywhere – as long as it's away from this place.'
Police have met with concerned shop owners and residents and have vowed to look into the problem.
Sergeant Rob Kearley said: 'Obviously when the smoking ban came in there was a change with people being out in the street smoking, but we were unaware of this particular issue regarding Bemisters Lane.
'There is a strength of feeling and our next step will be to review that and look at how we can resolve it.'
If the police believe an orderly house is not being run, they have the power take action against a pub, which could include measures such as reducing hours.
However, this has not yet been considered and would only be enforced if there a string of offences were committed that could be identified with the pub.
Kerri-An Suffield, owner of the pub, said: 'We try and keep swearing and noise to a minimum and we clean the street – we go out there a few times a day and sweep up.
'Bemisters Lane is a noisy street anyway because there are a lot of pedestrians down that street, not just my customers.'
Pub manager Richard Suffield added: 'If you look down Bemisters Lane people are smoking outside shops and hairdressers and there aren't any ashtrays for them to put their cigarettes. We've got ashtrays outside. There's also the problem with people having their lunches on the seats which has nothing to do with us. We put on extra doorstaff and sweep up every day because of the ban.
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Smoking ban prompts landlords to quit
July 23, 2007
By Laurence Cawley
THE landlords of a Suffolk pub have become the first victims of the smoking ban - and last night a campaign group predicted that hundreds of pubs across the country will close as a result of the controversial crackdown.
After more than two years running the Greene King-owned Elephant and Castle in Hospital Road, Bury St Edmunds, licensees Marian and Gareth Thomas have decided to call time on their business.
The couple, who had their plans for a smoking shelter outside the pub turned down, claim the smoking ban was the final straw.
The news prompted Forest, the campaign group for smoker's rights, to warn the pub could be the first of hundreds nationally to be hit by the ban, and warned rural areas looked set to be the worst affected of all.
But opponents, the Action on Smoking and Health group (ASH), said pubs open and close regularly and that it was too early to say what the ban's impact would be.
Landlady at the Elephant and Castle, the 49-year-old Mrs Thomas, said although the ban introduced at the start of the month was not the only reason, it was an important one.
She said: “They weren't coming in before, and after the smoking ban they are still not coming in.
“We have cleaned the pub but it hasn't made a difference. We haven't got a proper smoking shelter and we are really suffering because of this ban.
“We were thinking about doing something else anyway. We don't want to go bankrupt because of this. “We could have been given a choice (to stay or go) but the government hasn't given us a choice.”
Mr Thomas, 47, added: “We are leaving because of poor business and the ban hasn't helped. It is not the only reason.
“Pub trade is slowly declining everywhere but it is hitting traditional drinking pubs.”
Simon Clark, director of Forest, the pro-smoker's rights group, said: “Several hundred pubs could close in the next two years because of the ban.
“We don't expect it to happen immediately. Our big concern is that particularly in rural areas, the local pub is the heart of the community and if they go to the wall it will have a major impact on rural communities.
“The pubs at greatest risk are the “landlocked” pubs that have no outside areas. Smokers will choose those pubs with areas outside with heaters where they can smoke.”
But Simon Dockrell, spokesman for Action on Smoking and Health (ASH) said: “It is regrettable but if this is within weeks of the smoking ban it is likely to be to do with something else.
“The truth is pubs close and pubs open. In Scotland, the smoking ban has not made any difference. In fact there is one more pub in Scotland than before the ban came in.
“Reports from the pub chains, which are just starting to come in, seem to show that it has been pretty good for business.
“Yes, people said they would not go into pubs once the ban took effect but there were also a lot of people who either went rarely or not at all who said they would go more often.”
Greene King was unavailable for comment last night.
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Four teenagers jailed for torture
12/18/06
Four teenagers who burned, beat and abused a girl with learning difficulties have been jailed.
The four from Bromsgrove, Worcestershire, ignited aerosol sprays to burn Katy James, 17, during four hours of torture.
Wynette Darkes, 17, and Hayley Kirby, 18, were given six and a half years in prison. James Smale, 17 and Robert Hart, 18, were given indefinite terms.
They all pleaded guilty to causing grievous bodily harm.
They also all admitted attempting to pervert the cause of justice.
Flame throwers
The two males cannot be considered for parole until they have served at least three years and three months.
Worcester Crown Court heard the attack took place at Darkes and Smales' flat in Burcot Lane on 23 March.
Prosecuting, Nicholas Cartwright said Miss James was also verbally abused, threatened with a knife, battered with a chair and foot-rest.
She was forced to drink a glass containing urine and cigarette butts and made to eat chilli powder.
Her hair and head were burnt when two aerosols were converted into "flame-throwers".
He said Kirby instigated the violence claiming to have suffered a miscarriage because Miss James smoked near her.
Judge Alastair McCreath called their behaviour "unspeakable and wicked".
"Her ordeal lasted for many hours and amounted in ordinary language to torture, physical and mental," he said.
"Whatever the apparent reason for it was, what you did was grotesquely out of proportion to anything she had ever done to you, if she had ever done anything at all."
Hearing problems
Katy's mother, Dawn Lazri, said the attack had left her daughter with long-term problems.
"She has severe scarring to her stomach and legs, on which she hopes to have plastic surgery at some time in the future.
"In addition, she now has hearing problems which were caused by the blows inflicted to her head, and she suffers from a lack of confidence."
Det Sgt Sue Farrell, from Bromsgrove CID, said it was a nasty attack which caused shock in the community.
"Katy was lucky in that her injuries were not even more serious.
"However, an experience like this is not easily forgotten.
"We are keen to reassure residents that incidents of this nature are extremely rare."
ReadFour hours of torture
A 17-year-old student was burned with a home-made flame thrower during a horrifying four-hour torture ordeal, a court heard.
Aerosol cans of air freshener and furniture polish were squirted at Katy James and the jets set alight with a naked flame. She was attacked by a gang of teenagers at the flat they shared in Burcot Lane, Bromsgrove, after her smoking was blamed for Hayley Kirby's miscarriage.
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Shisha bars defy smoking ban in UK
April 14, 2007
London: In a few months, it will be the end of smoke in pubs and other public places in Britain, as a ban on smoking in public places come into effect from July onwards. The news has spelled disaster for London’s shisha bars.
Shisha smoking is part of exotic cuisine culture in Europe.
It is a classic Arabic pastime where smoke oozing out of flavoured tobacco (heated over coal and passed through water) is inhaled.
“Most people come to Edgeware road to have some shisha after food. Lebanese or Egyptian food is often accompanied with it,” says Mohammad Khalife Manager Al-Dar bar.
Another bar owner says the Arabic water-pipe smoking should be exempted from ban as it is in United States. Ibrahim el Nour believes a ban could have a profound impact on Britain's Arabic community especially the young.
“This ban will lead our youth to drinks and drugs. Shisha smoking is mild and is a part of Arabic cuisine. We will know the impact 2-3 years down the line,” says El-Nour.
Though many shisha smokers say it is their equivalent to the British pipe, not everyone agrees it is tradition. Some of them claim that shisha and hookah is less damaging to health than cigarettes, while the anti-smoking groups disagree with the view.
“Think of five men sitting together in a room getting through a whole pack of 20 in an hour. Multiply that by ten and you have the equivalent of a single shisha session,” says Martin Dockrell member ASH - (Action on Smoking and Health) UK.
While debates are ongoing at the highest level, even the shisha smokers on Edgware road believe an exemption can still be agreed on the issue.
ReadShisha cafes face extinction
"Shisha bars are unlikely survive the [smoking] ban because, unlike a pub or a restaurant, the principal activity is smoking a shisha pipe. In New York, shisha bars are exempt from the ban. Sadly, in Blair's Britain, few people seem to care that an entire culture is about to be destroyed."
Simon Clark
Taking Liberties, 14th April 2007
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Father Beats Smoking 12 Year Old Daughter
Dad beat daughter in Boxing Day violence
January 26, 2007
By Andrew Bellard
A FATHER launched a violent assault on his 12-year-old daughter because he suspected she had been smoking.
Blackburn magistrates were told he slapped, punched and kicked her on Boxing Day.
The strict disciplinarian, who had previously assaulted a son and another daughter, then attacked presents the girl had received for Christmas.
He slashed her clothes with a Stanley knife, threw her mobile phone against the wall and smashed her hair straighteners and hair dryer.
The 47-year-old, who lives in Darwen, cannot be named for legal reasons. He admitted child cruelty and was committed on bail to Preston Crown Court for sentence.
Clare Fanning, prosecuting, said the incident started when the girl arrived home later than expected and she was asked if she had been smoking. Her father verbally abused her before slapping her four or five times across the face.
"She crouched down and tried to protect herself but he managed to punch her on the nose which started bleeding," said Miss Fanning. "He took hold of her left arm and twisted it before "booting" her in the ribs as she lay on the floor."
At that point the child's mother said there was no need for what was happening and pulled the girl away.
But he took her phone and smashed it before going to her room, slashing her clothes and breaking her hair equipment.
Daniel King, defending said his client did not attempt to excuse what he had done.
"He would concede that he is a strict disciplinarian and for that he does not apologise," said Mr King.
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Smoking ban expected to affect bingo habits
July 1, this year will see a smoking ban imposed on all public places in England and Wales, and as the current proposed legislation will not exempt private members clubs, this will make lighting up in bingo halls up and down the country illegal.
In Scotland, a smoking ban was put into place in March 2006, and early reports suggest that this has created a dire situation for the country's many bingo venues. Income, and as a result prize money, has dropped by anything from 17% up to 26%, and many bingo clubs have already closed because of this.
Scottish clubs have tried to curb these falling revenues by installing devices outside, such as patio heaters and canopies, but even this is proving quite an inconvenience for the members who do smoke. It has also attributed to a drop in revenue due to players going out for a quick puff in between games, rather than playing on the many fruit machines inside bingo halls.
As a relatively large percentage of bingo players are smokers, and will probably not want to stand outside in the cold, it is believed that many bingo players, who enjoy smoking cigarettes and other tobacco products whilst playing, will seek out alternatives.
Gavin Blowman, head of marketing at Britain's most popular online bingo website, Jackpotty.com suggests, "This will inevitably lead to more people joining online bingo websites as they allow members to play in the comfort of their own home.
"Many players also prefer this because there are fewer restrictions - there are no closing times and certainly no dress code!"
The social aspect of a traditional bingo hall is not lost either; players at bingo websites such as Jackpotty.com can chat and make friends in the various chat rooms, and there is a strong sense of community whilst playing bingo on the internet.
"I like to play early because it means I can chat with my friends in the Breakfast Club. I've met loads of new friends on here", says Natalie Palmer, 38, of Peterhead in Scotland. And with cards starting from as little as 10p and recent bingo payouts of nearly £55k, it's not hard to see why playing bingo on the net has become more and more popular.
Many bingo players in Scotland have now turned to online bingo as an alternative. As this is played at home, the smoking ban has no effect on it at all - in fact, once the smoking ban starts to cover the whole of the UK, it is expected that online bingo will really begin to take off, which is great news for bingo lovers, as the jackpots will get bigger and bigger!
-ends-
Notes to editors For further information, please contact:
Gavin Blowman
Redmode
Tel: 01482 24 24 24
Email: gavin.blowman {at} redmode.com
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Restaurants to shelve traditional attraction after smoking ban
4th December 2006
Andy Dickenson
African restaurants are planning to shelve traditional attractions in the wake of the smoking ban.
Restaurant owners said shisha or hookah pipes would be left as merely decorations to hang on walls after the new law comes into effect next year.
The ban will mean the end of shisha cafs, whose clients are mainly Muslims and use shisha as an alternative to drinking alcohol, forbidden in Islam.
But also the use of the pipes in ordinary restaurants which serve hookahs for smoking fruit-flavoured tobacco as a dessert option.
Sherry Eskici, who owns the Mascara Restaurant in Western Road, Brighton, with her sister Bita, said: "I don't think it's very good but what can we do?
Smoking shisha is very popular here so its going to be a real shame to lose it.
"People mainly smoke apple here and the fragrance is very nice. It's not like cigarette smoke that fills the room.
"We have many who come especially for the shisha. It's one of the attractions of this place. But the ban won't have an affect on takings."
Smoking will be banned in all enclosed public spaces such as pubs, cinemas and restaurants from July 1, 2007, after MPs voted for the new law in February.
People will still be able to smoke outdoors and in their homes but calls for private clubs and pubs serving food to be exempt were rejected.
Adel Alami, owner of Cous Cous House, Preston Street, Brighton, said: "We don't charge people for smoking shishas, its just something to give people a taste of the tradition of the food they are eating. It will be a shame to lose it because people enjoy it, but I'm not a smoker so I'll be happy. It gives people a flavour of the Middle East but we don't have it in Morocco any more either because its been banned there too."
Others said they thought the ban was unfair as the traditional pipes have less harmful effects.
Bita Eskici said: "Smoking I understand because that's really bad for you but shisha doesn't have all the chemicals that cigarettes have. It's just tobacco leaf pressed with fruit.
"Our customers are going to miss it. We may still display the pipes but obviously we won't be serving it any more. It's a shame.
"A lot of our customers who smoke go outside but they won't be able to do that with the shisha. We just don't have the facilities.
"There's no way we can carry on using the shisha here."
Health campaigners said it was inevitable hookahs would be banned along with cigarettes because they too produce harmful smoke, despite filtering it through water.
Amanda Sandford, of Action on Smoking and Health (ASH), said: "There are a lot of myths around shisha smoking but it could be worse than smoking cigarettes.
"A water pipe smoker may inhale as much smoke as a someone smoking 100 cigarettes because they smoke for longer. The inhalation of smoke is far greater and there are enough studies to show there are short-term health consequences."
As the ban approaches, hospitals are also preparing to make their facilities smoke-free zones.
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U.K. smoking ban threatens to douse pub sales
Oct 13, 2006
Sarah Turner
LONDON (MarketWatch) -- Pub and bingo hall operators in England and Wales could see their sales partially extinguished when a government smoking ban kicks in next summer.
In a land where there's a pub for every 1,000 people, the shift will likely resonate.
Sales at bingo operators could be hit by as much as 27%, similar to what happened in Scotland earlier this year when a ban took effect, said industry members. The government's move to ban smoking in enclosed spaces could also moderately reduce sales at some pub operators next year, according to analysts.
"I think what's happened in Scotland has created a clear indication of what can be expected in England and Wales next year," said Steve Baldwin, communications manager for the Bingo Association.
He said revenue at Scotland's bingo clubs dropped by between 14% and 27% in the first six weeks after the smoking ban was introduced there in March.
"I'd expect the U.K. to go exactly the same way," Baldwin said.
'We're of the view that it's going to be a major challenge for the industry.'
— Neil Williams, British Beer and Pub Association
Rank Group (UK:RNK: news, chart, profile) , which operates 117 Mecca Bingo clubs in the U.K., making it the second-largest bingo operator, said in September that sales dropped 14% in its Scottish bingo clubs during the 13 weeks to June 26 after the smoking ban was introduced, as players spent more time away from the tables. By some accounts, more than 60% of bingo players are smokers.
Rank Group said that from March to June, club admissions fell 6% and spend per head dropped 9%.
"People didn't realize just how committed some people are to smoking," said Baldwin, noting that players are arriving later, leaving earlier and not spending money during intervals in main-stage bingo games on food, drinks or gambling machines.
Pub operators in Scotland have also felt the effects of the ban.
"In terms of the pub operators the best indicator we have at the moment is the impact we're seeing in Scotland. Overall sales figures (there) are flat to down 3% year-on-year," said Timothy Ramskill at Dresdner Kleinwort. See more global markets coverage.
J.D. Wetherspoon (UK:JDW: news, chart, profile) , which operates the Wetherspoon chain throughout the U.K., recently said its Scottish sales dropped 0.3% on a comparable basis in the fourth quarter of its 2006 fiscal year, which translated into an 11% drop in adjusted operating profit. On its Web site home page, Wetherspoon lauds the fact that 101 of its 650 pubs are non-smoking.
Rival Greene King (UK:GNK: news, chart, profile) took a bigger hit. It operates around 1,600 pubs, including the Hungry Horse pubs and Old English Inns as well as Belhaven pubs in Scotland and also brews beer such as Old Speckled Hen. Its Scottish comparable sales were down 2.4% in the thirteen weeks to July 30.
Larger company Mitchells & Butlers (UK:MAB: news, chart, profile) , best known for its diverse portfolio of both food and drink haunts, including well-known, upmarket chains such as All Bar One and Browns, reported positive 18-week to Sept. 16 comparable sales in Scotland of 2.6%. This was still slower than overall comparable sales growth of 3.8% in the same period.
The legislative changes have yet to significantly undermine shares in most of the pub chains.
Since March 31, Wetherspoon shares have added about 44%, Greene King shares have risen about 28%, Mitchells & Butlers shares have gained around 25% and Enterprise Inns gained 12%, all within the context of broadly higher U.K. markets.
Bingo group Rank's shares haven't fared as well, rising just 5% in that period. The company also operates food outlets and casinos and is currently restructuring its business.
Based on recent sales figures and share prices, pub operators appear more able than bingo companies to adapt to the smoking ban, mostly because -- unlike bingo players -- their customers can move outside. That needs to be taken in context, analysts caution.
They noted that sales figures from Scotland are from the summer, when people aren't reluctant to go outside for a smoke and a drink, and that this summer's soccer World Cup also boosted overall pub attendance.
"We've had a few months of data from Scotland, but it has been a pretty good summer and we've had the World Cup as well. Things could have been worse," said Dresdner Kleinwort's Ramskill.
Beneficiary may be the food
Pub operators seem pragmatic in the face of change, and are improving their food offerings to keep the customers content. Greene King said it was encouraged by the growth in food revenue in Scotland, which it said is important for the business's development.
However, "selling less beer and more food is negative for margins," said Ramskill. "If you pull a pint of beer, it doesn't take a lot of staff time to pull that pint, but if you're serving sandwiches you need someone to make them and clear away."
Ramskill expects a U.K. smoking ban to lead to flat-to-modestly negative sales and underlying profitability down around 5% in the pub sector in the first year after its introduction, depending on the operator.
"We're of the view that it's going to be a major challenge for the industry," said Neil Williams, communications manager at industry body the British Beer and Pub Association.
The sector is highly competitive with around 60,000 pubs trading across the U.K., and if there's a downturn in business as a result of the smoking ban, some pubs will close, Williams said.
Most are expected to survive the change, though some at the lower end of the scale may be forced to close.
"I think that the main sufferers won't be the quoted companies, but will be the smaller operators who can't afford to invest in outside areas or external things like heating and awnings," said Nigel Popham at Teather & Greenwood stockbrokers.
Pub operators are extremely cash generative and this provides support to their share price because they tend to return this cash to shareholders.
Of the U.K.'s largest pub operator, Enterprise Inns (UK:ETI: news, chart, profile) , Jeremy Batstone, head of equity research at stockbroker Charles Stanley Securities said: "The company remains incredibly cash generative so the combination of cash generation and the possibility of increased returns to shareholders may very well outweigh the adverse impact of the smoking ban."
Analysts said M&A could also continue to be a feature in the sector, boosting its investor appeal. "People seem to be quite keen on the sector -- there's been a lot of takeover activity," said Popham.
However, for bingo operators, a change in taxation policies may be the only way to save the sector. "There is no way the industry can survive in its current form under the existing tax regime once the smoking ban is introduced. Bingo is the most heavily taxed gambling activity in the U.K. because it's subject to VAT," said Baldwin.
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Lancashire-based Trust Inns plans to set aside a sizeable budget to help licensees prepare for next summer's smoking ban.
10/05/06
Tony Halstead
Tenants who need assistance to develop new facilities will get full support and financial help, the company has promised.
Trust Inns, which runs 447 tenancies across England and Wales, is urging all hosts to make early decisions on a smoking ban strategy.
Business development managers are visiting every pub to discuss what licensees will need in the future.
Managing director Brian King said a brochure had been issued to every licensee outlining the range of support and solutions available. King said many licensees may prefer to finance their own developments but stressed financial help would be available which hosts would repay to the company through increased rent.
"We have not yet finalised how much money will be needed and it may be towards the end of October by the time we have covered the entire estate to determine what our licensees require," he said.
Trust Inns is spending £5m per year across its estate on general capital improvement schemes and ongoing maintenance but anticipates the next annual spend will be considerably in excess of this figure when smoking ban costs are weighed in.
King said it will be another month or so before an accurate picture of the financial requirements became clear.
"We are planning to help our tenants install such things as new awnings, garden furniture, smoking shelters and bespoke smoking areas," said King. "There will be widely differing requirements as no pub is the same, but our licensees will already have a good idea of what they will personally require."
Trust Inns will use the experience gained north of the border, where it has already helped its Scottish pubs prepare for the ban which was introduced in March.
The company currently operates 60 pubs in Scotland and carried out schemes to help 45 houses in advance of the ban.
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