Positive Environment News

UK Pub Group Wetherspoon to Ban Smoking, Shares Hit

Date: 25-Jan-05
Country: UK
Author: Pete Harrison

"You've got to be realistic and say a ban is inevitable, and it's just a question of when," Finance Director Jim Clarke told Reuters. "We're saying, let's be proactive and get on with it."

Wetherspoon shares were down 2.6 percent at 253-1/4 pence by 1430 GMT, valuing the low-price beer operator at about 487 million pounds ($916 million).

"When companies go to the non-smoking model there's a potential 7 to 12 percent disruption to sales," said analyst Charles Wilson of Bridgewell Securities.

Plans for a widespread ban on smoking in public places was announced by the government in November as it looks to encourage healthier living and crack down on antisocial behaviour.

Officials said elements of the ban could be introduced from 2006, with the full plan -- expected to cover over 90 percent of bars and restaurants -- likely to be in place by the end of 2008.

The TUC, Britain's umbrella trade union organisation, welcomed the initiative from Wetherspoon, a city-centre operator famed for converting unusual sites such as garages, cinemas and railway hotels into pubs.

"One of Britain's biggest pub chains is acting to save its staff from the dangers of lethal second-hand smoke. The bogus argument that banning smoking is a threat to the pub, club and restaurant business must now fall flat on its face," TUC General Secretary Brendan Barber said in a statement.

Wetherspoon said it would initially ban smoking in about 10 percent of its pubs at the beginning of May 2005.

Wilson said this would give it the opportunity to back-track if the scheme proved a failure.

"It's not science, but the concern about Wetherspoon is that a high proportion of its customers are smokers -- for example pensioners and students who tend to smoke more," he said.

Wetherspoon said its pubs were increasingly geared to selling food, which does not mix well with smoking.

"This is the way the industry is going," said Clarke. "About 25 percent of our sales are food, and if you add on the soft drinks and wine that go with that, it takes it up to 40 percent."

"Even smokers like being in a non-smoking environment, as long as they can go to the beer garden for a cigarette," he added.

Wetherspoon criticised the government plans, which would only allow smoking in pubs that do not also sell food.

"The government's approach to the issue of a smoking ban does not make sense, since pubs can get around it by giving up food sales. We believe our approach of a complete ban after a period of notice is the right one," said Chairman Tim Martin.

(additional reporting by Mark Potter)

© Thomson Reuters 2005 All rights reserved

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