Inside Track by Peter Martin
It could have been so much worse. That’s become an increasingly common response from pub operators this week to health secretary John Reid’s plans to clampdown on smoking in pubs and restaurants. For the past year or so senior figures across the sector have been talking about the inevitability of a blanket smoking ban. Now, almost unexpectedly, the pub and bar industry has some options to work with. If you don’t serve food or are a private members club, it looks like your customers can carry on smoking. Even the restaurant sector, which had largely come to terms with the prospect of a smoke-free future, may have some "wriggle-room", with a number of big name players now exploring the potential of operating private cigar clubs. Retiring for a cigar, cognac and a game of snooker after dinner might become all the rage again, especially if there are no staff around. As with all compromises, there is a lot of uncertainty about what the White Paper actually means. What is the definition of food? Will pre-packed snacks be included, for example? Will a ban apply to an entire premises, or could separate "food-free" rooms be exempt? What’s the position on outside areas? Could there be time-based flexibility, where smoking might be allowed once food-service had stopped? The last example might be pushing the spirit of the legislation a little far, but who knows? We are now only at the White Paper stage, the Government has promised more consultation, and even with a smooth ride a ban is still four years out. The recent row over casinos and the Gambling Bill proved that even the best-laid plans can come off the rails. All it took in that case was a late intervention from the Daily Mail seeing a golden opportunity to have a go at the Government’s moral credentials. There will be no easy ride in Parliament for this legislation. Arguments on the lines that a public ban will only force people to smoke and drink at home will undoubtedly be aired, and aired again. So the pub and restaurant industry should have plenty of time to test its commercial options before a ban becomes a reality. The prospect of a smoking prohibition, if only partial, should be a real catalyst for change in the pub and bar market. It has been suggested that between 10% and 30% percent of the nation’s pubs will opt to forsake food and keep smoking. It will be a tempting prospect for some, however the market facts suggest that option will be little more than a short-term reprieve. Alcohol sales are flat, beer sales are falling and smokers are a dwindling breed. That doesn’t sound like a sound commercial proposition to put your money behind. On the other hand, food has become an ever increasing proportion of the overall pub sales mix, eating-out generally has grown 84% in the past decade alone and more and more people are giving up smoking. Sounds like a better investment bet to me. The ban should be a spur to the majority of the pub market to start taking food even more seriously and investing in the systems and service that will help them compete in the wider out-of-home eating arena. There is no doubt a lot of pubs, especially community locals, will suffer immediately a ban comes into force unless they begin shifting their business base. Another option, of course, would be for a whole swathe of community pubs, particularly tenancies, to turn themselves into private community clubs, just like their neighbouring British Legion or Labour Club. That would be a simple side-step. It’s unlikely the big tenanted pubcos, like Enterprise, would be too bothered, as long as they bought the beer and paid the rent.