Mitchells & Butlers has warned that the Government's proposed smoking ban could lead to unhealthy consequences for the nation.
The Birmingham-based pubco, which owns the All-Bar-One, Harvester and O'Neill's chains, spoke out after announcing annual pre-tax profits of £184m, with like-for-like sales up 5.6 per cent. The company has also completed a £100m share buy-back as the result of strong trading and ongoing pub disposals.
M&B cautioned that the proposed smoking ban in food-led establishments could reverse the Government's intended effect of creating a healthier, smoking-reduced nation.
Chief executive Tim Clarke said: "At M&B we have strong growth from our food sales at about three times the profit of the industry average and fully intend to continue growing this element of our estate. "Equally, around 25 per cent of our estate has less than 10 per cent of its sales through food and in these pubs, if faced with a choice in four years time, we would consider taking out the food and focussing on drink."
This may be good news for local kebab vendors. But it presents a less than satisfactory scenario for a Government attempting to curb binge-drinking habits by encouraging a broader focus beyond straight alcohol consumption in our pubs.
Speaking on the industry at large, Mr Clarke continued: "The current proposals are simply an incentive for pubs with a small food element to drop food and allow smoking. What we are suggesting is that all pubs are allowed to have well-segregated smoking and non-smoking rooms so food can continue to eb served."
The scenario of pubs ditching grub and encouraging smoking has emerged as one of the strongest potential bargaining chips in an industry which is preparing for a protracted period of consultation with Government over the ban.
With analyst Panmure Gordon predicting that M&B's profits will be reduced by up to 10 per cent in the event of the ban, Mr Clarke's warning is clearly an opening salvo in what could be a long campaign.