The smoking gun

The ban on smoking in public places in England, which came into force on July 1, marks the beginning of the end of a concerted campaign against the tobacco industry stretching back four decades.

The ban is, however, far more than a further attack on tobacco, which accounted for £13bn in sales in 2006. It is likely to be remembered as a catalyst for much broader change in the way the way we socialise, as well as providing a framework through which other industries may be judged to be against the wider public good.

Purely in terms of tobacco sales, evidence from the Scottish ban – which came into force April 2006 – suggests that sales in England are likely to see an 8% drop in volume, as smokers either consume less outside the home or kick the habit.

Perceptions and behaviour around smoking will change, but cigars, which for years have been viewed as the more acceptable face of smoking, will see the largest decline, estimated at 15-20% in volume according to Euromonitor International, as the opportunity for this out-of-home indulgence largely dries up.

Although heavy declines are predicted in the first year, they are unlikely to be the death knell for an industry that still counts 25% of the UK adult population as customers, in spite of the highest taxation in Europe, an almost complete ban on advertising and increasingly graphic government-sponsored health campaigns.

For the Government to reduce the prevalence of smoking yet further, it is likely that a series of measures including raising the legal smoking age to 18, the removal of tobacco products from public display, the removal of smaller pack sizes and even a ban on smoking in built-up areas could all be on the statute book by the end of the decade.

Needless to say, the ban is going to have much broader ramifications on the way Britons socialise, particularly at night. Bars with few or no facilities for smokers will lose out to those that can provide them with outdoor comfort – which now means plasma TVs, surround sound and winter heating.

That said, looking at evidence from bans already imposed in Ireland, Scotland and Wales, a typical pub can expect to see sales fall anything from 5%-50% in the first year, depending on product offer and customer base. Clearly outlets which have limited or no outdoor space will prove to be the biggest losers, and ultimately the ban will serve as the calling of time on the old-fashioned boozer.

Conversely, entertaining in the home will develop as a more central theme to UK life, with supermarkets and off-licences benefiting from further migration away from licensed pubs and bars. This should bring the UK more in line with the Continent in terms of sales split towards the end of the decade.

Food is now the saviour of the licensed trade. Big chains as well as independents have already invested heavily in repositioning themselves around this proposition, which can provide huge margins. Pubs and bars are unlikely to have it all their own way, however, as the established food service industry will continue to defend its corner.

The continued strong performance of casual restaurant chains such as La Tasca and Wagamama, as well as the popular “third space” offer from coffee shop chains, suggest the licensed trade will have a fight on its hands. Supermarkets have also entered the fray, offering shop-bought take-away offers, and even food service brands like Pizza Express now appear in retail, blurring the boundaries between what had previously been very distinct sectors.

The alcoholic drinks industry may be facing more serious long-term issues. With tobacco in apparent retreat, lobbyists are setting their sights on alcohol and packaged food as the next public health cause.

Further regulation of the alcoholic drinks industry, beyond the current system of self-regulation, would appear to be a matter of when rather than if, although the industry appears to be doing its best to extricate itself from some more obvious minefields, such as alcohol sponsorship appearing on children’s replica football shirts.

It would appear that the ban on smoking in public may well be followed very quickly by a pre-watershed ban on the advertising of alcoholic drinks, with further restrictive legislation to follow if that does not do the trick and alcohol remains at the top of the public health agenda.

Ultimately, the ban on public smoking should be viewed much less as the end of tobacco and more the beginning of a fuller, and some might say a more puritanical, shift to state intervention on matters of public health.

The decision by the Government to shift from a weak, partial ban will rightly be seen as a watershed in British social policy and ultimately the way consumers live their lives. 

Ian Bell, senior UK analyst at Euromonitor International, contributed to this week’s Trends Insigt

 

Much has been made of the cost to the alcohol industry and others that disproportionately attract the custom of smokers but other industries are likely to benefit from the intended outcomes of the smoking ban. Of the 30-plus health-related complaints measured on the TGI, the vast majority are suffered by smokers. For whatever reason, smokers are also less likely to take regular exercise than are non-smokers and that merely exacerbates the burden they place on their health. Perhaps without the smoking habit to dissuade them, more people will take up sport and exercise, at least to the level of their non-smoking counterparts. Research will keep us posted as to whether or not such desirable effects are being achieved. The chances are the short and long-term effects of the ban could be very different to each other.