Smoking ban already shaping pub market

The journey towards a UK-wide smoking ban in enclosed public places has already started to shape the pub landscape, leading operators have revealed.

For Punch Taverns, the UK's largest pub landlord, with more than 9,000 sites, smoking has been a factor in acquisitions for some time, according to Neil Griffiths, director of property and strategy.

"Certainly, since we've known a smoking ban was likely, we've avoided buying pubs that couldn't offer some form of smoking ban compromise," he told Caterer.

Derek Andrew, managing director of Pathfinder Pubs, the managed arm of Wolverhampton & Dudley Breweries, agreed that certain types of pub would be affected badly, forcing down their market value.

"Post-ban, there's little doubt that pubs without a decent food business, or those lacking an outside area, will suffer most," he said.

The forthcoming ban has seen many of the larger operators begin the process of shaking up their estate in preparation, with Greene King this week announcing the sale of 155 sites to Admiral Taverns.

However, Brian Hickman, managing director (brewery) at pub company Daniel Thwaites, believes it is post-ban that the legislation will really start to mould the market.
"I believe we will see polarisation, with higher prices paid for pubs at the top end of the market, which will mean investors accepting lower returns," he said. "At the bottom end, far more boozers will go into alternative use, such as offices and housing."

The Federation of Licensed Victuallers Associations has called on pub landlords to consider reducing rents for licensees whose pubs are hit worst by the smoking ban.

Smoking bill progress

Finalised regulations governing the smoking ban in England are expected to enter their remaining procedural stages in Parliament imminently, although a definite document is unlikely before January 2007 at the earliest.

The Welsh Assembly is pushing ahead with plans to introduce a smoking ban on 2 April 2007 and, having completed its separate consultation on smoking regulations earlier this month, plans to have them published by the start of the New Year.

So far, the Department of Health has said only that a ban in England will start next summer - to the frustration of operators.

Stephen Goodyear, chief executive of London pub company Young & Co, has become the latest to call on the Government to name a start date. "It is our view that this change is better done sooner than later," he said.

By Chris Druce

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