Smoke signals
Published:  27 August, 2008

A ban on smoking in public places, high taxation on tobacco in all its forms, and restrictions on advertising. Where in the western world did these ideas first take hold - California? Ireland? The answer is actually Nazi Germany.

Hitler's passionate anti-smoking stance was fuelled not just by his own personal dislike of tobacco, but by the increasing medical evidence presented to him by his scientists. A link with lung cancer was established and during the war years the f ührer became concerned about the high mortality rate, due to heart disease, among the heavy smokers in the armed forces.

The Nazis passed several laws banning smoking from government buildings and public transport, outlawed the sale of cigarettes to women in cafes and restaurants, and curtailed tobacco rations for service personnel. The propaganda machine portrayed smoking as a threat to the Reich, though it was some years before the campaign achieved its goals. By that time, a defeated Germany was in ruins, so it was questionable whether the decline in tobacco use was due to the health campaign or a crippled economy.

It was almost 60 years before a major western legislature considered any similar controls on tobacco usage - Singapore first introduced smoking restrictions in 1970 - when in 1998 California extended a workplace smoking ban, introduced four years earlier, to bars and restaurants. The state remained in splendid isolation for a while, until in 2004 Ireland became the first nation to prohibit smoking in all enclosed public spaces.

The floodgates began to open. Norway and New Zealand followed suit the same year. Other US states, as well as Italy, the UK, Estonia, Portugal, France, Spain, the Netherlands, Sweden and Romania, all now operate some form of public ban on smoking. Even Germany is back in the fold, to the horror of many smokers who know their history.

== Sales slump ==

Most of this legislation is still so young that it is difficult to determine exactly what long-term impact it will have on the drinks industry. It's fair to say that few trade bodies were anticipating an uplift in sales, predicting that on-trade customers who saw smoking as an integral part of their night out would simply stay away from bars and restaurants. The questions were: would such customers consume the same amount of alcohol in their own homes, and would they be replaced by non-smoking patrons who had previously avoided smoky venues?

Not everyone would identify a smoking ban as one of Hitler's ideas, but campaigners in many territories have readily demonised the policy as a sort of fascist infringement of their rights. From a medical point of view, this stance is barely credible - there is simply far too much evidence about the harm caused by passive smoking. But when bar and restaurant owners protest that the smoking ban is killing their business, perhaps the legislators have a case to answer.

The UK arguably has the most to lose, thanks to its traditional reliance on on-trade drinks sales. The union introduced the smoking ban in stages, starting with Scotland in 2006, and Wales, Northern Ireland and England following in 2007.

John McNamara, chief executive of the British Institute of Innkeeping, painted a grim picture of the state of play in English pubs after the ban had been in force for six months. A survey of just under 3,000 licensees revealed that sales had slumped by 7.3 per cent since smoking was outlawed.

"It's a concerning figure, on the basis that if you're a mainly drink-led pub and you haven't got space for an outside area, or you can't provide food, you're going to have a real problem," he said.

Rural pubs, famously a magnet for overseas tourists, could expect to fare worst of all, Irish publicans warned their British counterparts. Country bars closed at a record rate in the republic, with around 1,000 reportedly going out of business between 2004 and 2007.

After the first year of the smoking ban in Scotland, the Scottish Licensed Trade Association said alcohol sales had fallen by 15 per cent, though the rate of pub closures did not appear to be beyond the norm.

== Weighing up the evidence ==

In November last year, the British Beer & Pub Association revealed that beer sales had crashed to their lowest levels since the thirties in 2007. Britons were now drinking 9.5 billion pints a year compared to the 1979 peak of 12 billion pints.

In 2007 alone, beer sales in Britain fell by

7 per cent and unsurprisingly an accusing finger was pointed at the smoking ban. But there were other forces at work. Even before the smoking ban was dreamt about, the British were changing their drinking habits - beer and pubs have been steadily losing ground to wine and home entertaining for the past few decades.

In 1988, the off-trade accounted for 25 per cent of alcohol sales, compared to 37 per cent now; total beer sales are just under £16 billion, falling by 3 per cent, while total wine is just over £9 billion, rising by 4 per cent. Alcohol sales overall are flat and many observers feel this is at least as much to do with pressure on household incomes, and an increasingly health-conscious national mindset, as it is with the smoking ban.

There is evidence from elsewhere in the world, in places with less of a pub culture than the UK, that smoking bans do not have negative effects on drinks sales and may even boost them.

Michael O'Keeffe, a spokesman for the Vintners' Federation of Ireland, which represents 5,000 pubs outside of Dublin, says 20 per cent of pubs have closed since the smoking ban. But he adds: "There are a lot of other factors that have contributed. The drink-driving legislation definitely had an effect, as does cheap supermarket alcohol. People's lifestyles have changed - they don't go for four or five pints on a Wednesday any more, they're much more health conscious.

"People have gone back to pubs since the smoking ban and I don't think anyone would say it was a bad thing. It's actually been very well received of late. It was a fantastic innovation and we did right to introduce it."

Dr Michael Eriksen, of Georgia State University, Atlanta, and Dr Frank Chaloupka, of the University of Illinois , Chicago, have weighed up the available data. "The vast majority of scientific evidence indicates that there is no negative economic impact of clean indoor air policies, with many studies finding that there may be some positive effects on local businesses," they wrote in 2007. "This is despite the fact that tobacco industry-sponsored research has attempted to create fears to the contrary."

Eriksen and Chaloupka stress that the most reliable studies take into account objective measures such as "sales tax revenues, employment, and the number of licensed establishments from the periods before and after the implementation of the policy, along with comparable data from other jurisdictions where there was no policy change as a control group".

They cite research into 15 California and Colorado communities which examined sales revenues at on-trade outlets before and after a smoking ban and found there was no significant economic impact on either restaurants or bars.

== Looking on the bright side ==

Another quoted study, by Alamar and Glantz, "found a median increase of 16 per cent in the sale prices of restaurants covered by a smoke-free air restaurant policy, while finding no significant differences in the sale prices of bars subject to a smoke-free bar policy".

They add: "Given this, the authors conclude that these policies increase the profitability of restaurants, while not adversely affecting the profitability of bars."

Eriksen and Chaloupka say there is a tendency for struggling retailers to blame a smoking ban for their woes. But they insist: "Contrary to the fears raised by the tobacco industry and others, comprehensive reviews of research on the economic impact of smoke-free air policies consistently conclude that these policies do not have a negative economic impact.

"The 2006 Surgeon General's Report, for example, states that 'evidence from peer-reviewed studies shows that smoke-free policies and regulations do not have an adverse economic impact on the hospitality industry'."

They end with a prediction : "It is likely that clean indoor air laws will continue to spread throughout the United States and around the globe, where smoke-free environments will be the norm and smoking in indoor public areas will be the rare exception."

So perhaps not lifestyle fascism at all and possibly not the financial disaster some retailers predicted . The drinks trade has always managed to adapt to changes in consumer behaviour before. The fact that this development has been triggered by legislation does not present a markedly different challenge. Indeed, there is much to suggest that those who do not meet that challenge were already struggling to survive.