This is a big year for tobacco. Smoking in public places will be outlawed right across the UK by the summer. Then, from Oct 1, retailers in England and Wales will only be able to sell cigarettes to customers aged 18 and over. The new laws present drinks shops with some challenges, but could also open up opportunities to boost sales.
Figures from Nielsen's Republic of Ireland arm Retail Audits show tobacco sales in
Eire have gradually recovered since
its smoking ban was imposed
in 2004. Total tobacco sales during the 12 months to Oct 1 2006 went up by 9 per cent, to £669 million.
While it is too early to get any firm data on the effect of last year's
smoking ban in Scotland, Imperial Tobacco says early indications show the market is down 2 to 3 per cent, and it expects
it to recover to pre-ban levels.
Wales became smoke-free on April 1, Northern Ireland follows on April 30, with England bringing up the rear on July 1.
Imperial Tobacco's trade communications manager Iain Watkins says
the bans could help the off-trade. "The Republic of Ireland has had the ban for three years and off-licences have not only seen their share of the tobacco market increase, they have seen an increase in sales of alcohol and other products associated with staying at home.
"The message for the trade is if you're a convenience store, a forecourt or an off-licence this is almost a commercial opportunity for you. There's definitely a swing towards people staying at home."
Watkins says some retailers are moving towards Big Night In branded sections in their shops, with confectionery, DVDs and related products on sale next to the alcohol, to capitalise on the trend. He adds: "Off-licences' share of total tobacco sales has been falling over the last eight to 10 years and the ban is almost an opportunity for this to change."
Gallaher's trade communications manager Jeremy Blackburn agrees that the smoking restrictions could work in favour of drinks shops, depending on location and what local pubs do to adapt.
"There will still be a demand for tobacco. If you're an off-licence, the chances are there will be people who go home and smoke and the associated purchase will be alcohol," he says.
Blackburn says the opportunities for the off-trade depend to some extent on what pubs do. In Ireland, for example, some pubs initially de-stocked tobacco, thinking there would be no demand for it. Similar moves elsewhere could provide an opportunity for the off-trade.
If pubs provide good facilities for smokers, the tendency towards drinking at home could be lessened, Blackburn says.
"The important thing is for retailers to know their area and know their local customers," he adds.
A spokesman for British American Tobacco says drinks shops in rural and suburban locations are better placed to take advantage of shifts to drinking at home as rural pubs find it harder to adapt to accommodate smokers.
City centre pubs are better able to invest in and adapt premises to get round the ban and therefore less likely to lose trade, he says.
The three main tobacco manufacturers have pledged support for retailers through advice from the sales force. Help is also at hand from the Department of Health, which is sending guidance and no-smoking signs to 1.7 million businesses in England during April.
Public health minister Caroline Flint
says businesses should "be removing all smoking rooms and start putting up no-smoking signs". The signage and information is also available at www.smokefreeengland.co.uk/resources, and advice should also be available from town councils.
The next challenge for tobacco retailers comes on Oct 1 when the minimum age for buying cigarettes goes up to 18. The Department of Health has introduced the move to crack down on teenage smokers, and says it will make it easier for shops to spot children trying to buy tobacco. Retailers have expressed concern about possible trouble from 16 and 17-year-old smokers when they are no longer allowed tobacco.
When the DoH announced the law change last year, Flint also warned of tougher sanctions ahead for retailers persistently selling tobacco to children.
"Access to cigarettes by under-16s is not as difficult as it should be and this is partly due to retailers selling tobacco to those under the legal age. If a particular shop is known locally as the place for children and teenagers to easily buy tobacco, we want to stop that shop selling it.
" These proposals demonstrate our determination to reduce the number of teenagers smoking, thereby reducing the number of people with preventable diseases and the incidence of health inequalities," she
Trade communications manager at Gallaher Jeremy Blackburn says retailers are "very concerned" about what will happen when the age restriction is raised. "We're doing what we can to support them," he says, "preparation is key. Retailers should all be using the No ID, No Sale material. We have sent some up to the sales force, and it will be distributed to shops". Blackburn says a centralised consumer campaign publicising the change is essential. "As we all know, it's a tough enough environment on the front line."
Imperial's Watkins says its sales force will offer retailers advice as legislation is implemented this year. The company's trade website
is at www.imperial-trade.com.
CitizenCard, the organisation behind No ID, No Sale, will be developing new training materials. A No ID, No Sale retail pack will publicise the new age
limit and will be distributed "well before" Oct 1, it says.
Seminars for staff are taking place across the UK (www.noidnosale.com). A spokeswoman for the DoH
says a public awareness campaign will be launched in the summer.
Several multiple grocers have already voluntarily moved the minimum age for tobacco purchase to 18. Asda made the changes last September and Morrisons on Feb 26.
Justin Playford, assistant manager at Morrisons in Seaford, East Sussex, says the store has not had to deal with angry 16 and 17-year-olds since the change.
"In this store, we haven't had any reaction, but then we use the Challenge 21 policy, where you have to look 21 or over or we'll ask for ID. To my knowledge, we haven't had any problems with customers," he says.
Supermarket staff were fully behind Morrisons' decision to take an early lead in raising the tobacco-buying age, he says.
"We are one of the biggest supermarkets and for us to stand up and bring it forward means that our customers are going to get used to it before the full implementation in October. All of us at Morrisons certainly back that."
Wine Cellar's general manager for trading Steve Parker says customers aged 16 and 17 will be able to buy tobacco until the law change kicks in, but shops will display posters warning of the age rise during August and September.
Parker admits that awareness of the change in minimum age within the trade could be better. "Not that many people in the trade are up to date with the implementation - some people think it is still a proposal," he says.
"It's important that we tell customers, and we'll spend about two months doing that before the change happens," he says.
One positive aspect of the change is that now alcohol and cigarettes have the same age restriction, it'll be easier for staff to remember and use the Challenge 21 procedure effectively.
Association of Convenience Stores chief executive James Lowman has described a public campaign about the law change as "essential".
He says: "As a result of this change in the law, many customers who were previously able to buy tobacco will now not be able to overnight and it is retailers who will be on the front line in enforcing the new age.
"It is essential that there is a well-funded and effectively-targeted communications campaign to explain the change in the law and ensure that local retailers and their staff are not faced with abuse
from young customers.
"Before Oct 1, consumers must know that the age is changing, and it is the government's responsibility to ensure this happens."
Meanwhile, the government continues its fiscal crackdown on the tobacco industry. The Treasury increased cigarette duty by 11p for a 20-pack in last month's Budget.
Tobacco Manufacturers' Association director Christopher Ogden said the increase - which it says is small - "is an indication that the government acknowledges that tobacco duty is the cause of the UK's high levels of smuggling and cross-border shopping".
adds: "We welcome this continued restraint but it is still an increase. It will serve only to widen the price differentials between the UK and the rest of the EU.
"It will further encourage smuggling and counterfeit activity and enhance the economic incentive for smokers to shop abroad or purchase tobacco products on the black market."
With the year so full of changes and challenges, drinks shops will need to make sure they are up to speed with the law and get advice on ranging to make the most of the opportunities ahead.
Smoking ban: your responsibilities in brief
England will become smoke-free on July 1 this year.
From that date, it will be against the law to smoke in nearly all enclosed public places, workplaces and in public and shared work vehicles.
The law applies to anything that can be smoked. This includes cigarettes, pipes (including water pipes such as shisha and hookah pipes), cigars and herbal cigarettes.
Managers of smoke-free premises and vehicles will have legal responsibilities to prevent smoking and to ensure that no-smoking signs are displayed.
Managers will have to show that they have taken reasonable steps to meet the requirements of the law. These might include staff training and introducing a smoke-free policy.
Local councils will be responsible for enforcing the new law, and should be able to offer businesses information and advice.
Failure to comply with the new law will be a criminal offence. Penalties and fines for
smoking offences in England range from a £30 fixed penalty notice for smoking in a smoke-free place to a £2,500 court-awarded fine for managers or owners failing to prevent smoking in smoke-free premises. Failing to display
no-smoking signs could attract a fine of up to £1,000.
What's all the snus about?
Sticking a lump of tobacco under your lip could become the next trend if two of the major cigarette firms have their way. British American Tobacco is lobbying the EU to remove its ban on snus - a smokeless tobacco popular in Sweden but outlawed in other EU countries. Snus is sold loose or in small sachets, and is held behind the upper lip without chewing or sucking.
Swedish-style snus is made by grinding sun-cured and air-dried tobacco leaves, and adding water, salt for taste and humectants to keep it moist. BAT has opened a snus research facility in Southampton and carried out year-long pilots of branded snus in both Sweden and South Africa under its Peter Stuyvesant and Lucky Strike brands.
Gallaher - which manufactures snus and sells it in Sweden - also thinks the ban should be lifted. Trade communications manager Jeremy Blackburn says: "While Gallaher recognises that no tobacco product is completely free from risk, we believe consumers should have access to an alternative tobacco product where the health risks have been shown by many in the health community to be less than those risks associated with smoking. As such, the company welcomes constructive dialogue with the EU, governments, public health bodies and others in seeking to present the potential benefits of lifting the ban on Swedish snus."