Business Analysis: Pub giant to bring in smoking ban early

Tim Martin, the founder of the JD Wetherspoon pub chain, has proposed a total smoking ban across his 650 venues, two years before Government restrictions come into force - a move he previously condemned as "commercial suicide".

Tim Martin, the founder of the JD Wetherspoon pub chain, has proposed a total smoking ban across his 650 venues, two years before Government restrictions come into force - a move he previously condemned as "commercial suicide".

The company defended its decision, which knocked 3 per cent off its shares yesterday, saying it was reacting to changing public opinion. "An increasing percentage of the population are giving up smoking and a significant number of people are staying away from pubs and restaurants because they are too smoky," Mr Martin said. "We now feel it is the right time to go one step further."

He pledged to have 10 per cent of Wetherspoon pubs non-smoking by May and all its pubs smoke-free by May 2006. It already has a non-smoking pub in Exeter.

Although a long-standing advocate of an all-out smoking ban, Mr Martin has previously said he would wait for the industry to move as a group on a smoking ban, so as not to lose trade from smokers who could go elsewhere. But the tide against smoking, he says, is now too strong. "We believe we will seize a commercial advantage because, given the trends on smoking, we think we are reading public opinion right," he said. "We will bring people back into pubs that are staying at home at present."

His move will throw the spotlight on the rest of the pubs industry, which has so far convinced the Government to bring in tougher smoking restrictions over four years and pull back from an outright ban. The Department of Health has proposed that licensed premises that prepare and serve food should ban smoking by the end of 2008. Pubs not serving food and private members' clubs will be allowed to let customers smoke.

This food/smoking division has been widely criticised. Mr Martin said: "Pubs can avoid the ban by stopping their food service. But then the Government wants to end binge drinking, which eating helps to counter, so the Government has adopted an irresponsible and indefensible approach."

Some 80 per cent of pubs serve food, and the British Beer and Pubs Association (BPA) estimates that a quarter of all pubs will drop their menus to try to keep their smoking customers.

Mark Hastings, of the BPA, said: "All this measure does is force pubs back to the days of smoky drinking dens." His members are planning to continue to lobby the Government towards allowing separate smoking rooms within pubs so that they don't face a Hobson's choice on how to run their business.

Other large pubs operators such as Spirit Group and Mitchells & Butlers were refusing to budge last night from their existing strategies to reduce smoking. About 40 per cent of the industry has signed a BPA agreement to ban smoking at the bar by the end of this year, ban smoking behind the bar and have 80 per cent of floorspace dedicated as non-smoking by 2009.

Francis Patton, of Punch Taverns, said: "We are doing as much as we can to implement this scheme, irrespective of negotiations with the Government on its proposals." He says as much as 45 per cent of Punch's 8,000 estate will have a difficult choice on whether to keep serving food.

For Wetherspoon, which gets about 25 per cent of its sales from food, the move to go out on a limb with its smoking policy may well be a ploy to pressurise the Government and the industry into adopting a total ban.

Nigel Parson of Williams de Bröe said: "The other operators will be infuriated by this move as the Government will look at what Wetherspoons is doing and ask why they are not implementing a ban as well."

One pubs industry source said it was a calculated, commercial decision. "Pub groups like Wetherspoons cannot survive without their food sales. They want an outright ban, so they can continue to compete across the board," he said.

The BPA believes that up to 75,000 jobs would be lost and hundreds of pubs would close if an outright ban was introduced. Mr Martin, however, believes an outright ban is inevitable. "The rest of the industry has its head in the sand," he said.

Bans are certainly gathering pace around the world, arming Mr Martin and anti-tobacco campaigners with more and more material to debunk fears that the hospitality trade will be destroyed by a smoking ban.

California, for example, blazed the trail of anti-smoking legislation in the early 1990s and its hospitality industry has continued to grow. Revenues from the restaurant and bar trade rose 36 per cent between 1995, when the ban first came into effect, and 2001. By the end of 2001, there were 140 more bars operating in the state than in 1997. A survey by the New York City authorities a year on from its smoking ban of 2003 showed that tax receipts from restaurants and bars rose nearly 9 per cent, and that employment in bars and restaurants increased by 10,600. The Zagat restaurant guide found that nearly a quarter of New Yorkers were going out more often after the ban.

Now even Cuba, home of the cigar, has joined in, and Italy, where smoking is as much a part of its culture as pasta, also introduced a ban this year. Scotland voted in favour of an all-out ban last year and parts of England are fighting to introduce their own restrictions. Liverpool and Westminster city councils are pressing the House of Lords for the right to introduce their own smoking policies.

Mr Hastings says the pubs industry does accept that smoking is a dying habit. "We are all moving towards non-smoking. It is just a question of how and when we get there," he said. Wetherspoon may not be out on a limb for much longer.

JURY STILL OUT ON EFFECTS OF IRISH BAN

Nearly a year after a total ban on smoking in public places was introduced in Ireland, there are still mixed reports of its impact on the hospitality industry.

Official statistics from the Irish government show that sales in licensed premises are in marginal decline, falling 0.7 per cent in value terms in November compared with the same period in 2003, while sales in bars were down 2.8 per cent in volume terms in November.

Anti-tobacco campaigners believe the decline can be attributed as much to the growing availability of cheap alcohol in supermarkets.

But the pubs industry claims the effect of the smoking ban is having dire consequences on the livelihood of many pubs.

Tadg O'Sullivan, the chief executive of the trade body the Vintners' Federation of Ireland, says at least 2,000 jobs have been lost, hundreds of pubs have closed and licensees have seen a 20 to 25 per cent drop in trade. Mr O'Sullivan recently called the ban an "unmitigated disaster" for the Irish hospitality industry. Vintners' research on the brewing industry reveals a 10 per cent drop in business, and spirits groups have reported a 10 per cent decline. Anecdotal evidence has suggested that pubs are getting around the smoking ban by parking old buses outside their premises as temporary smoking shelters.

There have also been claims that Ireland's tourism industry has suffered as a result of the ban, and the latest official figures show a 3.6 per cent drop in visits from British tourists in the third quarter of 2004. But a survey from the Irish Tourist Board found that nearly 80 per cent of overseas visitors approved of the ban and visits from US and Canadian citizens increased by 2.8 per cent between August and October. The number of visitors from other European countries grew by 1.6 per cent.