Smoking ban fails to ignite revolution

27 June, 2008

Initial drop in tobacco sales but sector 'recovering'

Consumers are spending less on tobacco than a year ago - but the ban on smoking in public places hasn't had a significant impact on long-term trends.

Tobacco Manufacturers' Association figures for 2007 showed a 3% fall in tobacco consumption, in line with 2006.

Imperial Tobacco reported a drop in UK revenue from £442 million to £429 million in the six months to March, compared with a year earlier, and a fall in cigarette volumes from 11.7 to 10.8 billion, but described its UK performance as robust.

Ian Howell, spokesman for the Tobacco Manufacturers' Association, said: "Initial statements by Imperial soon after the ban suggested there was a significant drop in sales but it is recovering now. There certainly doesn't appear to be any great change over pre-existing levels."

But he added: "When over a quarter of cigarette consumption is non-UK-duty-paid, and over 70% of rolling tobacco, it is

difficult to gauge

what the patterns are."

It appears the off-trade hasn't fully cashed in on the impact of the smoking ban on the declining pub trade .

While total liquor volumes in the year to March were down 7% in the on-trade, the off-trade saw only a 2% rise over a similar

time frame.

Though on-premise beer - traditionally the on-trade's strongest alcohol category - saw an 8% drop in sales, take-home also experienced a 1% fall.

Nielsen consultant Graham Page estimated

around half

the decline in on-trade sales was linked to the smoking ban, with economic uncertainty and last summer's poor weather exaggerating the effects of long-term decline.

Page said: "The lack of consumers going to pubs hasn't resulted in a bonanza for take-home. The conclusion is that the industry as a whole has been a major net loser of drinkers because people haven't just switched to drinking at home."

Fighting talk

Imperial Tobacco is urging retailers to fight proposals to ban tobacco displays in stores, the sale of 10-packs and the abolition of

branding on packaging. Imperial believes

stores will lose impulse sales and footfall. Retailers can email views to tobaccoconsultation or write to Tobacco Consultation, DoH , Wellington House, Waterloo Road,

London SE1 8UG.

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