Reading the smoke signals

The imminent smoking ban in England presents a significant trading opportunity - despite licensees' fears that it will ruin their businesses - industry leaders agreed last week.

However, senior executives from the country's leading pub companies and brewers warned against complacency and complained that the "nightmare" of belligerent planning departments had been hampering licensees' preparations for the ban across the country.

Attending The Publican's third annual Industry Leaders' Forum at Brocket Hall in Hertfordshire last week, executives discussed the likely impact of the smoking ban on pubs and bars in England - and whether the industry could do a better job of getting its message across to policymakers and consumers.

New consumers

Research collated by sponsor Coca-Cola Enterprises suggested that 56 per cent of people were likely to visit the pub more after the ban's implementation next month, with only 15 per cent saying they wouldn't go to a smoke-free pub. The research suggested a raft of new consumers were likely to try pubs with a smoke-free environment.

The experiences of pubs in Scotland and Wales were at the top of the agenda. Punch Taverns' customer services director Francis Patton claimed the decline in machine income in Punch's Scottish estate had "flattened out", but said that 85 per cent of its pubs "are where they were [before the Scottish ban came in 14 months ago] or are doing better. Those who have prepared do well, while those who have not can suffer".

Noting the mixed weather in the first weeks of the Welsh ban, Scott Waddington, chief executive of SA Brain, said compliance had generally been good. Well-established houses selling food had got better, while wet-led sites were starting to suffer. "Things have overall been a bit better than we expected," he said.

David Elliot, managing director of Greene King Pub Partners, said there had been a "nightmare" around the issue of planning applications for outside areas. While the brewer had seen some success it was being hindered by "bloody-minded local authorities". Pubs also had to come up with more than just a smoking solution, he said. "You can't just rely on going smoke-free. You have to improve the offer of the whole pub."

Much had been made of food sales offsetting the decline from the smoking ban, but Enterprise Inns' chief operating officer Simon Townsend said pubs had to have the right kind of food offer at the right hours. "There's nothing wrong with a long-term wet-led house, it just has to get the food offer right," he said.

One solution, the executives agreed, would be to start selling pizzas or other easy-to-cook takeaway food after 10pm. Alex Salussolia, managing director of Glendola Leisure, warned that certain operators would face resistance from neighbours and local authorities to allowing people out of a premises to smoke. He felt a ban on smoking outside pubs, which the trade fears is on the way in Ireland, could soon come to the UK.

Optimism vs Pessimism

Shepherd Neame chief executive Jonathan Neame said he was optimistic about a smoke-free future. "Ambience is more important than food, and there are lapsed beer customers out there who'll return once a ban is in place," he said.

While there were those licensees who wanted to see the smoking legislation repealed, Jeremy Blood, managing director of Scottish & Newcastle Pub Enterprises, said he thought few people would want to go back to smoking pubs: "They like the cleaner environment."

A number of those round the table noted they were receiving tenancy applications from a wider range of people, with a number being attracted by the prospect of working in a smoke-free environment. Paul Wells, managing director of Wells & Young, said: "We need licensees who have a different model in mind. There are variable slots throughout the evening that can be used but people have to think differently about their business."

However Everard's Brewery managing director Stephen Gould warned that the hunt for new tenants shouldn't be at the expense of existing operators. "We should work intelligently with existing licensees to stop good people leaving the industry," he pointed out.

While efforts were being made to improve outside areas, those pubs that were landlocked would suffer badly, argued Laurel Pub Company chairman Ian Payne. "If you're a landlocked pub and your customers are predominantly blue collar your sales will drop between 15 and 20 per cent," he said. "We've been killed in some areas. You will have no choice but to change those sites."

Payne also noted that local authorities weren't helping matter. For example, Leeds council had designated a third of all outside areas non-smoking, he said. "They'll be banning outdoor heaters next," he added.

Concluding the debate, Andy Slee, trading director of Coca-Cola Enterprises, argued that the licensed trade derived half its £40bn annual revenue from smokers, and yet this group accounted for only 25 per cent of the adult population.

"The rest therefore rarely visit the pub and this represents a huge opportunity," he said. "Yes, licensees view the future with trepidation, and there is growing competition for the pound in people's pockets. But the British pub is and will remain the best place to socialise by miles."

Poor representation

The industry's inability to present its case to government and the wider world - despite pubs' "astonishing" level of compliance with new legislation - came under scrutiny at the Industry Leaders' Forum.

Stephen Goodyear, chief executive of Young & Co, said there was a need for a more cohesive approach to law and order issues and that, while the on-trade had "bent over backwards to be compliant, the off-trade had not".

Enterprise Inns' Simon Townsend declared: "We've been astonishingly compliant in the face of considerable legislative change." He also highlighted the way groups such as the supermarkets dealt with politicians. "Our industry sends along guys from the trading departments, while they send their legal teams," he said.

Glendola's Alex Salussolia said MPs "don't understand pubs, only how to get votes", while Laurel's Ian Payne condemned the licensed trade for being "appalling lobbyists. There is so much we could do, but instead we shoot ourselves in the foot".

Punch Taverns' Francis Patton called for more attention to be focused on the "vast majority of pubs that are firmly at the centre of their communities", adding that the myriad of ministers with responsibility for the trade wasn't helping matters. Salussolia was among those who contended that alcohol would be the next big target of the health campaigners. "It's going to be the next evil - and we've got to look at how we are going to manage that," he said.

The forum concluded that now was the time "to go on the front foot" and present a consistent message on issues such as responsible alcohol consumption, the value of pubs and the work being done to improve standards.