S&N predicts 10million pound smoke ban hit

Brewer Scottish & Newcastle has forecast that the smoking ban will cost it £10m in profit as the on-trade beer market declines by 5% in 2007.

The company said that the decline in the on-trade will only be partially offset by increases in the off-trade.

The company said: "The smoking ban will have a negative impact on UK market volumes.​

The smoking ban will have a negative impact on UK market volumes.​Scottish & Newcastle predicts smoke ban downturn.

"Our current projection is that the UK on-trade market will decline by around 5% during the course of 2007, of which 2.5% is the six month impact of the smoking ban."

The brewer's comments on the effect of the smoking ban in the UK came as it reported an increase in its market share in the UK beer market.

It reported that its main beer brands, Foster's, Kronenbourg 1664 and John Smith's "all gained share without sacrificing unit prices".

S&N also indicated that it had enjoyed "strong volume growth in cider", where it is "clear market leader".

It added: "Whilst we have lost some volume share at the low value end of the portfolio following our complete withdrawal from extra-fill, we have seen strong growth at the premium end, driving positive mix for us, as well as the sector."​

On the smoking ban, it added: "This development will reinforce the importance of ongoing investment in new product development and the application of lessons learned from Ireland and Scotland.​

"Given our track record, we believe we are well positioned to support the trade as they work to manage this change."

Tony Froggatt, chief executive, said: "Across the group we achieved branded sales growth of 8.9%. In the UK, our four lead brands achieved share growth in their respective segments."​

Revenue was up 7.0% at £4,155m and profit before tax rose 13.9% to £452m for the 12 months to 31 December 2006.