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Smoking Ban and UK’s Beer Industry Dissertation

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Acknowledgement

The execution of this research would not have been possible without the kind support and valuable contribution made by a number of people. First, I would like to appreciate the initiative and support of my instructor, who guided me throughout by inducing valuable information and knowledge. I would also like to thank all my friends and peers who were unswervingly involved in the planning and execution of this study.

Exceptional thanks go to Mosses and Paul for their priceless support in assisting me during the initial design phase; Suzie and David for their steadfast financial support; and Carlos for assisting me to plan the data collection process. The research also benefited immensely from Ann, Jude, and Marcus for their invaluable opinions and criticisms. Their insight and professional involvement are exceedingly appreciated. I would also like to acknowledge the roles played by all the respondents. The support they offered is greatly appreciated.

Abstract

The correlational study made use of a quantitative research design to evaluate the impact of the UK smoking ban on the country’s retail drinks sector. The smoking ban was introduced on 1st July 2007 and criminalizes the use of all substantially or wholly enclosed public places and working places for smoking purposes. The study results were both interesting and insightful. On one hand, they depict an industry that is painstakingly down on its knees, with no one ready to offer a helping hand.

On the other, they reveal an industry that is so arrogant to follow the laid down rules and regulations regarding the smoking ban. That notwithstanding, the study revealed important insights as to how the Drinks industry continues to suffer under the smoking ban. In summary, the smoking ban has caused the pub sector much anguish in terms of lost revenues, loss of clientele, decreased beer sales, high employee turnover, loss of security and confidence, massive pub closures, among others. However, there is an intricate type of relationship between the UK beer sector, the smoking ban, and the authorities that one can only understand by going through the study in detail

Introduction

Background

The history of smoking is almost as elongated as that of the health risks arising from the smoking habit itself. Up until recently, many governments did not recognize that incidents of ill health caused by exposure to passive smoke could become the single utmost avoidable cause of mortality in our society (Kelly & McCreadie, 2000; Howard, 1992).

The reality about the perils of passive smoke has since dawned on health professionals and policymakers, forcing governments across the world to come up with strategies and measures aimed at safeguarding citizens from the dangers posed by smoking. One of the measures has been to ban smoking in all public places, including bars, restaurants and other entertainment establishments (Associated Press, 2009).

The smoking bans have been able to safeguard individuals from health hazards associated with smoking, with researchers in countries such as the United Kingdom (UK) arguing that banning smoking in all enclosed public establishments will help prevent the deaths of 40,000 individuals over the next decade (Laurence, 2008). However, while the relationship between smoking bans and health hazards have been independently evaluated before, few studies have focused on how smoking bans affect public establishments that used to be frequented by smokers such as pubs and restaurants.

It is indeed true that entertainment establishments are particularly risky work-places in terms of exposure to second-hand smoke as “airborne nicotine concentrations can be up to 18.5 times higher than in offices or domestic residences” (Eadie et al, 2008 p. 1019). They are also a social attraction to most smokers as smoking patterns are influenced profoundly by social contexts. However, it should be remembered that pubs and restaurants are business establishments that are profit-oriented, and as such, they should be assisted to expand. It is within common knowledge that some government initiated measures such as smoking bans only helps to sink business enterprises rather than offer incentives for growth (“Economic Impacts,” n.d.).

Systematic researches have drawn a correlation between smoking bans in diverse countries on the one hand and loss of business and employment opportunities affecting particular establishments on the other. For instance, a smoking ban enforced by the Dallas City Council in the US in January 2003 saw alcohol sales plummet by over $11.8 million, with pubs and restaurants experiencing slumps in sales of between 9 and 50 per cent (“Economic Impacts,” n.d.). The smoking ban saw the closure of 4 restaurants. A study conducted by Ridgewood Economic Associates Ltd revealed the loss of 2000 jobs, $28.5 million in salaries and over $35 million in Gross State Product after the state of New York enacted the smoking ban in all enclosed public places (“Economic Impacts,” n.d.).

In the UK, a study conducted by a market research firm known as Neilson confirmed that alcohol sales “fell 8 per cent, compared to a steady 3 per cent fall in previous years, just under half of which was attributable to the smoking ban” (Laurence, 2008).

In Scotland, the decision to include pubs, restaurants and other entertainment establishments in the smoke-free legislation, passed in March 2006, was very hard to sell as many individuals in the licensed trade felt that it would interfere with business (Eadie et al, 2008). However, the government stood its ground, arguing that enforcing a smoking ban in enclosed public places would have considerable preventive and protective health benefits. As a result of the smoking ban, the Convention of Scottish Local Authorities estimated that at least 2,300 employment opportunities could be lost, and 140 pubs shut down by the end of 2007 (Petticrew et al, 2007).

The Study Context

The UK is a sovereign democratic nation situated off the north-western coast of continental Europe. By mid-2008, the population of the UK stood at 61,383,000, with people of working age representing 62 per cent of the entire population (Office of National Statistics, 2009 a). This age group is expected to engage in drinking and smoking than any other. The UK comprises England, Wales, Scotland and Northern Ireland. According to Market & Business Development (MBD), a market research firm, the UK had an estimated 57, 500 pubs in 2007, a slump of 1 per cent from the 2006 figures (Trends & Data, 2008). The research forecasted a further slump in the number of pubs and alcohol consumption in the coming years due to such factors as enhanced domestic consumption of cheap supermarket liquor, rising employment costs, and the smoking ban (Trends & Data, 2008).

Smoking in all enclosed public buildings and workplaces in the UK was outlawed on 1st July 2007. However, the decision to ban smoking had been agreed upon way back in 2004, when a Public Health policy paper was drafted to lay the groundwork for the rules to be enforced in phases. In 2006, all government buildings and the National Health Service (NHS) became the first targets of the smoking ban. By 2007, the ban was extended to all sheltered public places, including pubs and restaurants. Consequently, many establishments in the UK were put on notice to act within the guidelines of the ban. According to Laurence (2008), “more than two billion fewer cigarettes were smoked and 400,000 people quit the habit since the ban was introduced a year ago” (para 2)

Although compliance to the smoking ban has been almost 100 per cent, the battle towards legislating and enforcing the regulations in the UK has been vicious and prolonged, with the government machinery and health professionals on the one hand and the business enterprises and inflamed critics on the other (Laurence, 2008). While most business entities are feeling the heat economically due to lost business opportunities arising from the smoking ban, the government is of the opinion that ignoring essential issues of health can have far-reaching effects on any civilization no matter the economic prospects. In retrospect, the smoking ban has been massively popular among British citizens, with three out of four individuals supporting the smoke-free legislation (Laurence, 2008).

Problem Discussion

Any government across the world is mandated to take care of the health needs of its citizens through the tenets of the social contract. In the same vein, it is the duty of governments across the world to ensure that the population has enough opportunities to further their potential economically. The dangerous effects of smoking cigarettes in enclosed public places are well documented, with researchers and health experts warning individuals about the health hazards associated with the habit. According to Hudson (2004), the number of active smokers has tremendously dropped since the mid-20th century.

However, tens of thousands of people continue to die each year due to passive smoke emitted by smokers from the confines of enclosed public places such as pubs and restaurants. Eadie et al (2008) reveal that an estimated 70 per cent of pub and restaurants in Scotland did not restrict smoking before the enactment of the smoke-free legislation in 2006, consequently exposing many workers and revellers to second-hand smoke. A “…UK-wide research estimated that one bar worker a week was dying as a result” (p. 1020). Such grim figures catapulted governments into action to enforce smoking bans as a stop-gap measure of saving lives.

While the smoking bans were fundamentally needed in order to save lives that could have otherwise perished due to the dangers posed by passive smoke, particular types of business establishments such as pubs and restaurants were affected, with many reporting slumping sales in alcohol. Many individuals gave up smoking as cigarette sales slumped 6 per cent in the UK within the first year of the enactment of smoke-free legislation (Laurence, 2008). This was indeed a good indicator that the legislation was bringing positive change among the British nationals.

However, the pub business suffered profoundly from the legislation, “with 175 million fewer pints sold in the nine months from July [2007] to…April [2008] as smokers [were] been driven outside” (Laurence, 2008 para. 3). Ironically, however, a study done on behalf of The Publican revealed that although half of the licences sampled reported decreased sales volume since the smoking ban was enacted, “the number supporting it actually increased, with 64 per cent now supporting it compared to 57 per cent before the law came into force” (IAS, 2008 para. 8). Little knowledge exists as to what made the smoking ban impact the country’s retail alcoholic drinks sector. It is this gap that the study sought to fill.

Study Objectives

The general objective of this study was to evaluate why the UK smoking ban of 1st July 2007 that illegalized smoking in all enclosed public places and working places continue to affect the country’s retail drinks sector. The study aimed to achieve this purpose by undertaking a cross-sectional analysis of selected UK pubs serving alcoholic beverages. The following were the specific objectives:

  1. To develop a better understanding of how the UK pubs are affected by the smoking ban in relation to socio-economic dynamics and educational achievement.
  2. To critically evaluate the pub’s level of preparedness during initial enactment of the ban in 2007, and if resistance to comply with the rules could have led to the present situation.
  3. To evaluate the UK government’s policy framework towards the enactment of the smoke-free legislation, and if there was any economic considerations when the enactment of the legislation was carried out.

Research Questions and Hypothesis

This study was concerned with evaluating the correlation between the UK smoke-free legislation banning smoking in enclosed public places such as entertainment establishments on the one hand and the trend taken by retail drinks sector on the other. As such, it was guided by the following research questions and succeeding hypotheses.

  • Research Question 1: What is the relationship between the July 2007 smoking ban and the loss of livelihoods among individuals in the beer sector?
    • H1: individuals in the beer sector are more exposed to the vagrancies of the smoking ban than other people in other sectors since smokers’ forms their major clientele.
  • Research Question 2: How did the English pubs prepare their amenities to accommodate or prepare for the smoking ban?
    • H2: No adequate preparation was done before the enactment of the smoke-free legislation as pub owners could not afford the capital cost of erecting outside amenities.
  • Research Question 3: Would the costs of subsidizing outside smoking areas through offering government incentives could have matched the benefit of fewer pub closures and job losses?
    • H3: The government’s wish was to curtail smoking, and therefore could not fund such an exercise.

Value of Study

The value of this study can never be underestimated. Health professionals and government agencies are spending sleepless nights trying to reverse the appalling harm caused by the smoking habit. As such, any strategy that may bring society closer to a smoke-free society is invariably welcome. As such, smoking bans should be embraced with open arms and should take precedence over alcohol sale when Rational Choice Theory is used by virtue of the fact that it is most thoughtful to save lives rather than enjoy alcohol in the presence of smokers (Sheffrin, 1996). But it is also imperative to assist individuals in the licensed trade make up for the lost business by offering some viable alternatives.

In this perspective, this particular study came up with a body of knowledge that could be used by government agencies, health professionals and policy makers to ensure that individuals in the licensed trade in the UK and other places do not suffer economically under the whims of smoke-free legislations.

The study also filled the information gap that existed as to why UK’s retail alcohol market is suffering due to the July 2007 ban. This information is crucial to individuals working in the beer industry – manufacturers, bar owners, tenants and freeholders – as it will greatly assist them to manage both their costs and benefits in relation to the impact occasioned by the smoking ban. Today, more than ever before, such information is important as it cushions businesses against externalities and other vagrancies of the microenvironment such as government rules and regulations that may be unfavourable to business establishments.

Study Delimitations

Other than the usual challenges of time and financial resources, the study was unable to engage some of the targeted licensees in the selected area as they were unable or unwilling to provide fundamental data on how alcohol sales have been affected by the July 2007 smoking ban. Data on small pubs were hard to get since owners failed to keep documentation or figures of how they have been performing economically since the introduction of smoking ban. As such, the study mainly dealt with large entertainment establishments thereby limiting its scope. Other pubs had changed hands numerous times, therefore making the process of data retrieval difficult.

Dissertation Outline

The dissertation will be divided into five main segments, namely: Introduction, literature review, methods section, study findings and discussions, and finally conclusions, recommendations and future research areas.

Chapter one, presented above, highlights the background, study context, problem discussion, study objectives, key research hypothesis and value of study. Chapter two concerns itself with the review of related literature for this particular research, including an evaluation of relevant theories and concepts related to the key research questions and hypotheses. Chapter three, the methods section, looks at the conceptual framework and variable description, research design, data collection techniques, data analysis, and issues of validity and reliability. Chapter four involves itself with research findings and discussion, while chapter five presents some important conclusions and recommendations arising from the study findings, and future research areas.

Review of Related Literature

Introduction

This particular study purposed to evaluate why the UK smoking ban of 1st July 2007 that illegalized smoking in virtually all enclosed public places and working places, including pubs and restaurants, continue to affect the country’s retail drinks sector to date. Smoking bans can be simply described as public policies initiated mostly by governments to curtail tobacco smoking in places considered to be public or of public interest (Fiordelli, 2009).

The bans must be legislated upon for them to become laws that can be withheld by the constitutions of practicing nations. This section will critically evaluate the UK smoking ban by attempting to make comparisons of how the ban has affected the UK nationals across demographic, socio-economic and geographical characteristics. This section will also attempt to look at the effects of the UK tobacco ban on the country’s retail drinks sector from an economic perspective by critically discussing some economic concepts and theories that may help in trying to understand the scenario

Brief Overview of the UK’s Smoking Ban

The UK smoking ban was enforced in 1st July 2007, effectively banning smoking in all enclosed public places and working places. However, the idea to enforce smoke-free legislation in public places with a roof that is wholly or substantially enclosed was hatched in Scotland in 2004, after the government came up with a blue print aimed at attempting to improve the Scottish air from tobacco smoke pollution (Euroffice, 2010).

It is at this juncture that the Scottish government came up with a plan of putting greater controls over smoking in areas designated as public. The emphasis of the whole plan lay in the fact that smokers must never be allowed to subject non-smokers to passive smoke. Later, the plan was discussed in public and overwhelmingly endorsed by over 80% of the respondents (Euroffice 2010). By the end of 2004, The Scottish government was already working on the bill which sought to ban smoking in substantially enclosed or fully enclosed public areas.

According to Eadie et al (2008), smoking in substantially enclosed or fully enclosed public area in Scotland was banned in March 2006. Wales and Northern Ireland banned smoking in all enclosed public places in April 2007 (Paton, 2007). England followed suit in July 2007. The businesses that were worst affected by the smoke-free regulation include hotels, pubs, membership clubs, prisons, stadiums, theaters, public transport, planes and airports and ferry services (Euroffice 2010). However, it was the first two types of businesses that ended up being worst affected.

Pub and Restaurant Businesses: Worst Affected

In legislating smoking bans in the three countries, health interests were held in high esteem than business or economic interests as it had became clear that second-hand smoke as well as active use of tobacco products was becoming a real health hazard to individuals. For instance, Ireland, the predecessor of smoke bans in nearly the whole of Europe, had by 2007 reported a massive 83 percent decrease in air pollution coupled with an 80 percent decrease in cancer-causing pathogens found in pubs (Paton, 2007). The country had banned smoking in public places in March 2004. It was therefore prudent for its neighbors to follow suit and remove smoke exposure from the public domain.

The fact that smoking bans has saved a lot of lives from death and illness from the time they took effect in the UK can never be contested. Millions of pounds of tax payers’ money have also been saved, money that could have been used to cater for individuals affected and afflicted by passive smoke. Besides triggering the largest decline” in smoking ever seen in England,” researchers have revealed that the ban will curtail the deaths of over 40,000 individuals over the next 10 years in England (Laurance, 2008 para. 1). This is welcome news to everybody who supported the smoking ban upon its inauguration. But it may not be so for individuals dealing with the licensed trade.

Evidence of Beer Sales Decline in UK

A wealth of literature and systematic researches has always sought to quantify the ramifications of the smoking bans on the hotel industry, especially pubs and restaurants (Fleck & Hanssen, 2008). All indicators reveal a downward trend on the sale of alcohol in places where the smoking ban have been enforced, not only in the UK, but also in the USA and other countries in Europe (“Economic Impact,” n.d.). In the UK, pub proprieties have been counting losses ever since the smoking ban was enforced. Licensed Victuallers Association (LVA), an organization representing the welfare of pub operators in Wales, claimed that pubs across Wales had lost about 20 percent of their business just six months into the smoke-free legislation enforced in April 2007 (Devine, 2007).

In Britain, The British Beer and Pub Association (BBPA), also reacting to the negative effects of the July 2007 smoking ban, claimed that alcohol sales had plummeted to a level not seen before since the Great Depression of the 1930’s. According to the BBPA, total beer sales for 2007 went down by over 22 percent (Lewis, 2007). This is the year when Wales, Northern Ireland and Britain enforced the smoking bans. The BBPA claimed that such a decline is equivalent to “some seven million pints a day fewer than their peak in 1979” (Lewis, 2007 para. 1).

Further decline in beer sales upon the enforcement of the smoking ban presents itself in a survey conducted by BII and the Federation of Licensed Victuallers’ Association (FLVA). The survey revealed that beer sales had plummeted 7.3 percent since the July smoke-free legislation came into force1. Over 58 % of the licensees interviewed during the survey claimed that smokers were curtailing their visits to the pub, while 73% claimed smokers were not staying at the pub long enough (BBC News, 2007). This best explains why beer sales were slumping – when smokers don’t come to the pub or spend less time, then few people, may be non-smokers, gets to enjoy the beer.

Alcohol Consumption in the UK

The future of UK brewing and pub sector is constantly under grave and sustained pressure (BBPA, 2008). According to BBPA, this is largely a present macro-economic uncertainty and delicate consumer confidence. This notwithstanding, the resilience of the brewing and pub sector, and its elasticity to adapt to the downturn has been embarrassed by the Government’s overbearing tax structure and other regulatory frameworks over the last couple of years. At the time when the pub sector urgently needs a sympathetic policy shift, the government’s general policy agenda is slowly drifting towards the opposite.

In general, alcohol consumption in the UK has dramatically gone down due to a multiplicity of factors such as the smoking ban, ongoing economic recession, rising unemployment levels, among others. According to BBPA (2008), the total beer sales have dramatically slumped “8 million pints a day since the peak of 1979” (p.1). Beer sales are no different, having plummeted 16 million pints daily over an equal period of time. According to BBPA, pub closures have gone up from 2 a week prior to 2005 to a high of 36 a week presently. This foreboding situation has had a direct impact on alcohol consumption patterns across the UK. The figure below compares beer sales between on-trade and off-trade.

Total UK Beer Sales by Channel of Trade.
Figure 1: Total UK Beer Sales by Channel of Trade.

The figure above reveals a downward trend in alcohol consumption across the two channels – off-trade and on-trade, with a sharp downward trend starting from 2007, the year when the smoking bans were enforced in Wales, Northern Ireland and England.

When comparisons are made based on alcohol consumption by regions and demographic features, one cannot escape noticing that the UK drinking trends are peculiar and very different from commonly held perceptions. According to BBPA (2008), the total UK drinking trends have indeed been plummeting since 2004. BBPA figures reveal that the average alcohol consumption by men slumped “from 17.2 units a week in 1998 to 14.9 in 2006.

By women, it fell from 6.5 units to 6.3, having been at 7.6 in 2002” (p. 8). This clearly reveals that something is amiss, and one likely suspect must be the smoking bans. Consumption of alcohol among the young has also sharply declined, with drinking among young men going down from 12.6 to 9.0 units, a decline of 29 percent. For young women, consumption has declined 12.6 to 9.0 units over the same period of time, a decline of 29 percent. By regions, it is clear that Britons consume less alcohol than their European counterparts, ranking 14th of the 20 EU nations where comparable data is available.

Selected Cases on Smoking Ban and UK Pubs

Pub Closures

Loss of a business establishment, hence loss of livelihood, is perhaps the worst consequence meted upon pub proprietors in the UK. But sadly, this is what a sizable number of proprietors have to contend with since the arrival of the ban.2 Statistics reveal that about 6,000 pubs operating across the UK may have to shut down in the next five years if all stakeholders concerned, including the government do not take corrective measures aimed at addressing the impact of the smoke-free legislation (BBPA, 2008). One year after the ban was enforced, over 1, 400 pubs shut down across UK (Sky News, 2008).

Currently, the UK is believed to be home to some 76,000 – 100,000 pubs, all believed to be loss making. By 2012, Price Waterhouse, a reputable management and consulting firm, estimates that over 6000 pubs will have closed down due to the multiplier effects of the smoking ban (BBPA, 2008). Indeed, pubs across the UK are facing a difficult time. A recent nationwide survey reported by the Morning Advertiser revealed that two out of three consumers have made a choice to drink at the comfort of their homes rather than in pubs since the new law banning smoking in enclosed public places was introduced (Forest, 2008).

According to Lister (2007), pub closures in the wake of smoking bans is nothing new as it had been experienced in Ireland when the country enforced a smoking ban in all enclosed public places earlier in 2004. Statistics reveal that up to 1,000 pubs closed down in Ireland immediately after the 2004 ban was enforced3. Pub closures are also affecting Scotland, where the Scottish Licensed Trade Association claims a drop of a bout 15 percent in beer sales across the county (Lister, 2007). According to Sky News (2008), the rate of closures is worrying. By 2008, pubs were shutting down at a rate of “four a day because of poor sales and the effect of the smoking ban” (para. 2).

The reasons offered for this worrying trend are many and varied. Sky News (2008) revealed that pubs unable to offer an appealing outside area to be used for purposes of smoking were the big losers. Other reasons offered for pub closures are spiraling costs in terms of government taxes and other regulatory policies, declining beer sales, and fragile consumer confidence, mostly occasioned by such practices as the smoking ban.

All in all, the pub closures can best be described by the economic theory of the degree of price elasticity of demand as the shut down reveals that smokers no longer feel the urge to visit pubs anymore and therefore sales have plummeted. In other words, the pubs have turned highly elastic due to necessity, a factor that is known to affect the degree of price elasticity of demand (McConnell, Brue & Campbell, 2004).

Recession

Since the beginning of the recession in late 2008, many pubs have been forced to shut down or cut down on their operating cost. Ever since the introduction of the smoking ban in July 2007, the situation in the breweries and pub sector has been grim. According to BBPA, 52 public houses are being forced to shut down each week due to a multiplicity of factors, key among them the ongoing recession and the effects of the smoking ban (BBPA, 2008). Since the beginning of the ongoing recession, almost 2500 UK pubs have been shut as customers no longer have the extra money to spend at the pubs.

Indeed, the UK pubs have been hit by a string of challenges that have seen their fortunes plummet by the day. First to come was the January smoking ban legislation closely followed by the wettest summer ever to be seen for a very long time. The 2008 recession followed later, completely shattering consumer confidence at a time when pub operators needed it most (Page & Nielson, 2009). Many pubs in the UK were caught unprepared by the current recession as they had already been wrecked financially by the smoking ban due to decreased beer sales. As such, many could barely stand the effects of the recession, and were thereby eased out of business. A Consumer Confidence Survey conducted by Nielson revealed that in 2006, about 30 % of consumers spent their extra money on ‘out of home entertainment.’ But after the 2008 recession, only 18% of the consumers could afford ‘out of home entertainment’ (Page & Nielson, 2009).

Wettest Summers

Many analysts believe that the vagrancies of weather, especially during the period the smoking bans was enforced, may have had a role to play in diminishing the level of beer sales, effectively making many pubs to shut down. This microenvironment situation sent thousands of employees out of employment (Wood, 2010). Indeed, many pubs shut down during the summer of July 2007, immediately after the smoking ban was enforced since most smokers who used to frequent the pubs could not persevere the harsh weather to smoke outside. As it turned out, most pubs were either ill prepared or did not perceive the smoking ban as something that could really hurt their businesses (Fiordelli, 2009).

As such, they failed to erect an outside facility where smokers could spend their time. Still another theory could be that most pubs, being small family-run establishments, could not afford the costs of putting up an outside smoking facility.

Things got out of hand for the pub proprietors when the harsh weather persevered on, spilling its deadly effects into the summer of 2008. According to Fiordelli (2009), most pubs with outside smoking facility still enjoyed considerable business as smokers were not bothered by the vagrancies of weather. However, they were only a few large establishments, some of which have since shut down. Page & Neilson (2009) are of the opinion that the wettest summer coupled with the introduction of the smoking ban, and the ongoing depression really hurt the on-trade.

Level of Preparedness

From the ongoing pub closures, it is clearly evident that many pub proprietors across the UK were ill prepared for the oncoming effects of the smoking ban on their business establishments. According to BBPA (2008), 52 pubs are shutting down across the UK each week. This astronomical figure clearly reveals that many establishments either ignored to prepare for the smoking ban or had no resources to do so. It should be remembered that many pub proprietors in the UK fiercely fought the plan to introduce the smoking bans, and only caved in when the plans received overwhelming public support (Eadie at al 2008).

It is within public knowledge that many pub owners never wanted their business establishments to be included as enclosed public places. The level of resistance coming from the land lords, proprietors, legislators and other critics can be used to measure the level of preparedness among the pub proprietors. This gesture cost them dearly.

Critics of the smoking ban argues that it is the government which failed the pub proprietors for failure to prepare them psychologically, and even offering financial support to small family establishments that could ill afford to erect an outside smoking facility (Cairney, 2009). They are of the opinion that pub proprietors are victims of the same government that claims to have their interests at heart. Findings from a study published by BMJ today had indeed revealed that most people had wanted pubs from the poorest sections of England excused from the smoking ban (Adams, 2005). However, this never came to pass when the ban was finally enforced in July 2007.

Government’s Policy towards Assisting Pubs

According to Cairney (2009), governments all over the world must uphold the rule of law, including protecting their citizens. The citizens of any nation are the taxpayers, and must therefore benefit from the services coming from central governments. Within the next five years, the UK plans to tax the brewing and the pub sectors an additional £8 billon (BBPA, 2008). It is under this backdrop that BBPA feels the UK is introducing tough regulations that are aimed at decimating the brewery and pub sectors, the major taxpayers. In 2008, the UK introduced cross-cutting duties on alcohol of 6 percent above the recommended RPI (BBPA, 2008).

Such taxes and others not mentioned in this study have made organizations such as BBPA worried about incessant government interruptions yet it fails to act when the major taxpayers such as the pub proprietors get in trouble.

But governments all over the world must act tough to protect its citizens. Pub proprietors must have cried foul over the introduction of the smoking bans, and the subsequent refusal by the same government to bend rules and allow some pubs, especially those from the poorest sections of England, to operate outside the smoke-free regulations (Adams, 2005). It should be understood that the government’s refusal to assist in aiding to pollute the environment thorough passive smoke was done in the best interests of the majority of Britons who don’t smoke (Cairney, 2009). The smoking bans have been able to protect Britons from health hazards associated with smoking, with researchers in the United Kingdom arguing that banning smoking in all enclosed public establishments will help prevent the deaths of 40,000 individuals over the next decade (Laurence, 2008).

Smoking Ban and Loss of Employment

Many critics of the smoke-free regulation have flouted the government for the loss of employment opportunities occasioned by the July 2007 smoking ban. Due to the ban, 52 pubs are shutting down every week, while others are downsizing their workforce. The general argument is that an estimated 44,000 jobs in the brewery and pub sectors have already been lost in the last five years, and an additional 43,000 are anticipated to be thrown out in the next five years if urgent correctional measures are not taken to reverse the smoking ban (BBPA, 2008). The umbrella body argues that the government should at least do away with the smoking ban for now or propose some amendments so that more people don’t lose their jobs in the future as the beer industry – brewing, distribution, pubs, and bars – directly employs over 600,000 employees.

According to BBPA (2008), almost 60 percent of the employment opportunities are in the pub sector, an area which has been worst affected by the smoking ban. As such, according to BBPA, the government should be hard-pressed to reverse the smoking ban as it will be greatly benefit many Britons. However, the British government is very keen on eliminating smoking in all enclosed public places, including pubs and restaurants, as they are used by a wide variety of people, including children. Consecutive studies have shown pubs and restaurants to be particularly risky work-places in terms of exposure to second-hand smoke as “airborne nicotine concentrations can be up to 18.5 times higher than in offices or domestic residences” (Eadie et al, 2008 p. 1019). They also offer social attraction to most smokers as smoking patterns are influenced profoundly by social contexts. As such, the basic philosophy in the minds of health experts and other policy makers is that pubs offers a better breeding ground for non-smokers to get hooked up to the habit.

The Affluent and the Poor

Systematic studies have revealed that socio-economic status and educational achievement has a role to play in deciding if a particular pub or region has been affected more by the effects of the smoking ban than another area. In the BMJ study conducted in 2005 to collect views from the public regarding the passing of a bill that will prohibit smoking in an enclosed public area, respondents from the poorest parts of England requested pubs from poor areas be exempted from the proposed law (Adams, 2005). Studies have been conducted with the aim of understanding the dynamics of socio-economic status and lifestyles. The question of how alcohol and tobacco consumption are associated to socio-economic determinants of an individual or locality have always been the subject of inquiry among many researchers (Marmot, 1997).

According to Marmot (2007), there exists a vivid association, not only between poverty and disease, but also between inequality and disease. Accordingly, people from less affluent areas are more likely to engage in dangerous lifestyles that are more likely to lead to ill health than people from affluent areas. Such lifestyles include smoking and tobacco use. The researcher is of the opinion that people in low positions of employment consume more alcohol than those high in the employment ladder. Epidemiological evidence reveals a positive correlation between income bracket and the occurrence of alcohol abuse in the society (Keyes & Hasin, 2008).

Consecutive researches have also revealed a positive correlation between the level of alcohol abuse and the level of education received. A study conducted by Skager (2007) revealed that idle people, especially adolescents of over 15 years, engage more in antisocial and destructive behaviour than people who are occupied. It cannot escape mention that pubs located in less affluent areas are frequented mostly by young adults who may be looking for a job or are out of a job. It is also imperative to note that most pubs and restaurants located in less affluent areas do not have any courtyard or a convertible outside space, and are therefore likely to be hurt more by the smoking ban which criminalizes smoking in an enclosed public space.

UK Smoking Habits

According to the Office for National Statistics, many Britons have expressed the desire to quit smoking, perhaps because of the July 2007 smoking ban (ONS, 2009b). Using the most recent comparative figures released by ONS, it is evident that only 21 percent of Britons aged 16 years and over were active smokers in 2007 – the lowest level ever to be recorded. An estimated 66 percent expressed the desire to quit the habit in 2007, while 58 percent admitted they cannot give up the habit easily.

From the ONS figures, an estimated 17 percent of the smokers admitted to lighting up within 5 minutes after waking up, while the percentage of smokers who wanted to quit smoking in 2007 was uppermost among those who smoked fewer than 20 sticks a day. Health-related concerns were cited more as the reason the smokers wanted to quit, with 86 percent of the smokers who wanted to quit smoking citing at least one health concern. Another 27 percent of smokers who wanted to quit smoking cited financial reasons, while 20 percent citing family pressure and 15 percent citing the effect on children. The table below reveals the prevalence of cigarette smoking in Great Britain by sex and socioeconomic status.

Table 1: Prevalence of Cigarette Smoking by Sex and Social economic Status.

Job status Males (%) Females (%) Average (%)
Large employers & High managerial 16 15 16
High professional 17 13 15
Lower Managerial 24 20 22
Intermediate 28 26 27
Small employers 30 26 28
Lower supervisory/technical 33 29 31
Semi routine 33 32 33
Routine 38 33 35
Total 28 26 27
Source: Office for National Statistics: 2001

Smoking ban and health concerns: A case of Game Theory

The knowledge that smoking kills is a matter that has been in the public domain in the 21st century. Health professionals, anti-smoking advocates, government agencies, and other policy makers have taken the initiative to lead an awareness campaign about the perils of smoking and also about the dangers of passive smoking. But populations all over the world have been ignorant of the high-geared campaigns aimed at giving them the knowledge on the dangers of smoking and passive smoke. As such, governments have reacted by coming up with laws to curtail smoking, especially in public places.

The harmful effects posed by smoking have been well researched and documented in the last few decades. It has been scientifically proven that smoking poses a great risk to both the active smokers as well as those who passively take in second-hand smoke. A study conducted by Stillman (1995) revealed that smoking is the foremost cause of preventable death. The study also revealed that smoking-related diseases are involved in more than one third of all hospital admissions. It is against this backdrop that governments act by enforcing smoking bans to prevent people from the dangers of active or passive smoke.

Here, the game theory of economics can be used to analyse the scenario. The Game theory endeavours to mathematically capture the attitudes, values and behaviour of people in strategic situations, whereby an individual’s achievement or success in making rational choices significantly depends on the rational choices of others (Myerson, 1997). As such, it is the duty of governments to make rational decisions to assist other individuals such as smokers since their smoking habits put other people into real danger. In such a scenario, governments react using regulatory measures such as smoking bans.

The dangers of active or passive smoke are many and real. Still (1995) posited that women smokers are more often prone to life-threatening conditions such as miscarriages, still births, and crib death (Sudden Infant death syndrome, or SIDS). It is a well known fact that smoking kills an estimated 114,000 individuals in the UK each year. Many of these people die from lung cancer, cardiovascular disease and emphysema. According to the Game theory of Economics, decisions such as smoking ban had to be made even against a backdrop of sending people out of their own livelihoods to curtail such a waste of lives.

The Case of UK Breweries

The UK breweries had been on the receiving end long before the arrival of the July 2007 smoking ban due to high taxes and tough regulatory frameworks. However, the arrival of the smoking spelt doom for most breweries across the UK. According to BBPA (2008), there have been a total of 37 major Brewery shutdowns since 1997, with majority of them closing shop after the introduction of the smoking ban. Many of the breweries have cited lack of business opportunities, stiff competition and tough government regulations as major factors for exiting the market. BBPA argues that over 5000 jobs have been lost from the 37 brewery closures. According to the organization, “…this amount to over 25 percent of all brewing sector employees” (p. 5).

The announcement by Scottish & New Castle Brewery, based in Reading and presumptuously the second largest in the UK, that it was closing down due lack of market came as a surprise to many in the brewing industry (BBPA, 2008). The organization argues that the market share for beer and other alcoholic beverages has considerably shrank owing to a multiplicity of factors, key among them the ongoing economic recession and lack of market as beer consumption has considerably gone down. Another brewer, Castle Rock, had earlier been affected by the smoking ban but has since re-branded its products and business is upping again.

However, other brewers are not so lucky, with some citing recession, government interference, the smoking ban, and lack of consumer spending as major reasons why the British beer market is on a sharp decline (BBPA, 2008). Still, the government is yet to intervene to save the largest taxpayer from outright collapse. Indeed, it is promising to raise taxes on alcohol products to deter minors from consuming alcohol, further aggravating an already worse situation. According to BBPA, “not only will this fail to address the problem of alcohol misuse, it will further alienate brewers, pub-owners, licensees and consumers, damaging an ailing industry and punishing responsible social drinkers, particularly those on the lowest incomes” (p. 12).

Compliance to the Smoking Ban

In Scotland, many bar operators in the licensed trade ferociously contested the decision to include public bars and restaurants in the smoke free legislation (Eadie et al, 2008). The situation was not different in other countries including Wales, England and Northern Ireland, with many pub operators arguing that it will hurt their business establishments. However, the proposition to introduce the smoking bans in these countries was well received by their nationals. In Scotland, 80% of its nationals welcomed the move by the government to introduce the smoking ban, making individuals in the licensed trade and other critics to back down on their earlier protests (Eadie et al, 2008). The situation was not any different in Britain, whereby the landlords and pub operators hotly contested the introduction of the ban only to lose out to the public, who welcomed the ban with open arms.

After its introduction, individuals have generally agreed to comply with the ban, with statistics revealing a compliance level of 98% (Eadie et al, 2008). This can be credited to the huge fines meted upon individuals who do not comply with the law. Indeed, there exists minimal number of pubs that fails to comply with the law despite their incessant queries that the ban is not good for business. Indeed, some landlords and pub operators failed to comply with the regulation requiring them to erect outside smoking areas thinking that such a ban cannot hold water, and people will openly defy it. However, this was not the case, courtesy of huge fines applicable when a victim is caught smoking in an area designated as an enclosed public area. Apart from a few instances of non-compliance, majority of people and pubs have agreed to abide by the smoke-free regulations, a sign of victory to the administration

Methodology

Introduction

The purpose of this study was to evaluate why the UK smoking ban of 1st July 2007 that illegalized smoking in all enclosed public places and working places continue to affect the country’s retail alcoholic drinks sector. To meet the stated objective, comprehensive methodologies aimed at collecting the requisite data that could sufficiently answer the study’s key research questions and hypotheses while guaranteeing unsurpassed reliability and validity were developed. This chapter describes the theoretical framework and research design employed in the study. This section also offers a comprehensive analysis of the study population and sample size, and the data collection tools to gather the desired data from the target sample. Lastly, this part discusses the techniques utilized to maintain the quality, validity and reliability of the data gathering tools.

Research Design

This correlational study employed a quantitative research design to evaluate the relationship and effects of the July 2007 smoking ban and UK’s retail drinking sector. Hopkins (2000) postulates that most quantitative research designs aims at determining the correlation between an independent variable and a dependent variable, and are either descriptive or experimental. This particular study utilized a descriptive quantitative research design since the study subjects were measured once. This approach was chosen as one of the key tenets of the study was to measure the association between the smoking ban on the one hand and the intensity and frequency of liquor consumption on the other.

According to Sekaran (2006), correlational studies are best suited in cross-sectional cases where the researcher purposes to outline the key variables that are related to a particular phenomenon of interest. It is imperative to state that this particular study utilized a survey technique to gather the essential information needed to answer the key research questions. She postulates that surveys are tremendously efficient when the researcher is primarily interested in descriptive, explanatory or exploratory evaluation.

A survey gathers vital information needed to assess correlation between various variables by way of self-report as the study subjects have the capacity to respond to questions posed either directly or through technological procedures such as email or telephone. According to Richey & Klein (2007), a descriptive survey approach best suits the interests of this particular study since it offers a precise explanation of the characteristics, attitudes, and knowledge of a particular phenomena or variable under study.

To ensure the study was cross-sectional, a comprehensive review of related literature was carried out with a view of comparing the smoking habits and drinking patterns of English, Welsh and Scottish nationals. The review of literature was also used to undertake a hypothesis-testing study aimed at explaining the nature and scope of the associations between the July 2007 smoking ban and the intensity and regularity of alcohol use in UK pubs. According to Sekaran (2006), the hypothesis-testing approach can be of great assistance to this research since “it goes beyond mere description of variables in a situation to an understanding of the relationships among factors of interest” (p.119).

Theoretical Framework

According to Sekaran (2006), a theoretical framework “is a conceptual model of how one theorizes and makes logical sense of the relationships among the several factors that have been identified as important to the problem” (p. 87). A theoretical framework must map out and discuss the various interrelationships that exist between variables that are viewed to form an essential component to the situational dynamics under investigation. This study aimed at evaluating how the UK smoking ban has impacted the UK retail drinks sector.

The smoking ban came into force in 1st July 2007, making it illegal for any one to smoke in enclosed public places and work places. Based on the objectives of the study, the UK smoking ban, the effects of recession and the vagrancies of weather acted as the independent variables, while the dependent variables included pub closures, loss of employment, UK breweries, level of preparedness, health issues, socio-economic status, and the UK’s drinking and smoking habits. Based on the above description of variables, the researcher developed the following theoretical schema. It represents the path that the UK drinks industry may have followed to find itself in the current situation.

Theoretical Framework used for the Study.
Figure 2: Theoretical Framework used for the Study.

The Target Population and Sample

The target population for this study, sampled in the UK, was limited to pub proprietors, pub managers and pub employees of two dissimilar communities situated in one local authority area to make sure that pub proprietors and their employees were subject to the identical licensing regime. According to Sekaran (2006), a target population is depicted as all the components – individuals, articles, object, events, situations – that meet the fundamental sample standards for inclusion in a research study.

The researcher identified 40 community pubs from the 2 community areas, one from an affluent area and the other from a less affluent area. Using convenience sampling procedure, the researcher selected 12 pubs from each of the 2 community areas to take part in the study. Sekaran (2006) posits that a convenient sample consists of subjects in the study framework by the very virtue of being in the right environment at the right time.

After the 24 community pubs were selected for the study, the researcher proceeded to use convenience sampling to sample either the pub proprietors or their senior managers. Hopkins (2000) describes a sample as the components or subjects selected by a researcher with the aim of finding out or evaluating a phenomenon about the comprehensive target population from which the elements are taken. A total of 24 pub proprietors or their senior representatives were selected for the study. Afterwards, the researcher used simple random sampling to sample a total of 48 pub employees, 2 from each pub.

The rationale used in selecting more employees than proprietors was that the former stay long hours in the pubs than the latter, and are the one who deals directly with the customer. Also, pub employees are more knowledgeable with the drinking and smoking patterns of patrons than proprietors and supervisors. However, it was difficult to get the employees to respond to interview questions for fear of reprisals from their bosses. This confirms Bryman (1989) assertion that convenience non-probability sampling is better than probability sampling techniques such as random sampling due its high response rate.

The Sampling Criteria

All the subjects included in the study sample were selected to meet some precise criteria that were relatable to the two groups under study. The pub proprietors or their senior managers had to strictly meet the below criteria to be included in the sample:

  • Must be at least 25 years or older;
  • Must be a UK national who have resided in the community for a period of not less than 6 years;
  • Must have dealt in pub business for a period of not less than 6 years;
  • Be willing and ready to take part in the study;
  • Must display thorough understanding and knowledge of the 2007 smoking ban on the one hand and UK’s smoking and drinking patterns on the other;
  • Be of either sex.

The pub supervisors had to explicitly satisfy the following standards to be included in the sample

  • Must be 21 years or older;
  • Must have stayed in the UK for a period of not less than 6 years;
  • Must have dealt in pub business for a period of not less than 3 years;
  • Be willing and ready to take part in the study;
  • Must display thorough understanding and knowledge of the 2007 smoking ban on the one hand and UK’s smoking and drinking patterns on the other;
  • Be of either sex or race and nationality.

Data Gathering Tools

This correlational study made use questionnaires, fact sheets and a critical review of related literature to uphold the validity and reliability of the research findings (Webb et al, 1996). The questionnaire was chosen as the primary data gathering instrument, with the intention of evaluating how the UK’s smoking ban continue to affect the intensity and regularity of alcohol consumption in pubs.

It should be remembered that the study utilized a descriptive quantitative research design. As such, a questionnaire was best suited to collect descriptive data from the study respondents to answer pertinent research questions. Sekaran (2006) describes a questionnaire as a printed self-report form specifically designed to mine essential information obtainecd through written responses of the selected sample. Subsequently, the information obtainable through the administration of this self-report form is more or less similar in nature and scope to that obtained by a key informant interview.

The questionnaire has its own advantages and disadvantages. Sekaran (2006) posits that a researcher may choose to employ a questionnaire in a field study due to the following reasons:

  • They are able to achieve a high response rate since they can be distributed to the study subjects for completion at their own free time then collected or posted to the researcher;
  • They take minimal time and are easy to register;
  • They are anonymous as the identity of respondents are not obligatory on the duly completed forms;
  • They present a negligible opportunity for prejudice since they are often presented in a consistent manner;
  • Most questionnaires consist of closed-ended items, making it easier for the researcher to undertake a comparative evaluation analysis on each item. That notwithstanding, items that may prove helpful in exploring new horizons and knowledge beforehand unknown to the researcher should be enquired in an unstructured manner.

Two sets of questionnaires were utilized in the study. The first set was intended for pub properties, with the second set been administered to the pub workers. The questionnaires, all in English, consisted of three broad categories for each of the two sample groups. Part A intended to gather demographic characteristics, social economic status and academic achievement for each of the sample group. This information is fundamental in interpreting the results. Section B concerned itself with assessing the respondents’ perceptions, views, attitudes and understanding on the key issues relating to the study, that is, the effects of July 2007 smoking ban on their businesses. The last section was intended to conclude the interview process by posing some personal questions about key issues facing UK, especially regarding smoking and health related issues.

Secondary data for the study was collected through fact sheets and a critical review of related literature. The review of literature was fundamentally important since this study took a cross-sectional approach, reviewing or significant points of present knowledge about smoking and drinking habits found in the UK, socio-economic and educational indicators in relation to smoking and drinking, and theoretical frameworks. Consequently, it is safe to go by May (2001) assertion that such a review of documents and literature forms a good source of [corporate] data and information as they “…represent a reflection of reality” (p. 182).

Reliability and Validity

Reliability

Reliability is described by Handley (2005) as the level of consistency or uniformity with which the prescribed data gathering tools are able to measure the variables or phenomenon that they are designated to measure. The two sets of questionnaires used revealed outstanding levels of uniformity in the responses given by the study subjects. Comprehensive guidance and instructions on how to fill own questionnaires had been given to the subjects, thereby abridging data collector’s error. The guidance and instruction offered to the subjects also greatly assisted to curtail sources of measurement error, thereby guaranteeing the fact that data collected was reliable. Finally, the researcher took ample time to reassure the subjects about their own privacy and confidentially, enabling them to offer comprehensive and unabridged information. This enhanced reliability of data collected.

Validity

According to Handley (2005), validity refers to the level or degree to which a particular research instrument is able to measure or evaluate the phenomenon or viable that it had been intended to measure. Any data gathering tool must vehemently be able to fully represent all the factors, phenomenon, variables, or influences under study. This was well looked into in this study through the questions asked in segment two of the questionnaire as they measured and evaluated the subjects knowledge and perceptions on the effects of the smoking ban on the UK’s retail alcohol sector. In addition, the questionnaire was set based on the critical review of literature and key research questions.

This enhanced the validity of study results by making sure that the questions posed to respondents were representative of the responses needed to prove or disapprove key research hypotheses. The questions contained in the data gathering instrument were formulated in a way that was clearly understandable, ensuring the clarity of the responses given by the respondents. The strategies employed during the interview process in terms of guiding the subjects to respond to the questions ensured both internal and external validity. Consequently, the research findings presented can be transferred or generalized to other respondents within the selected population.

Ethical Considerations

Written consents were sought from the board of two local authorities that hosted the pubs since the researcher wanted to use their assistance to know the geographical locality of each pub within the communities before making the selections. Due to constraints of time, the researcher used mobile telephone or email services to secure consents from each of the respondents after making contact with them during the first and second field visits. Clarifications about the aim of the study and the techniques that were to be utilized to secure the confidentiality of all respondents were also explained. A guarantee was issued to the pub employees that no information will, at any time, be released to the public in a manner that will expose their confidentiality or positions of employment. Other rights were such as the right to self determination and informed consent were also clearly explained to all respondents.

Data Analysis

After quantitative data from the field were cleaned, coded, it was entered and analyzed using a statistical program known as Statistical Package for Social Sciences (SPSS). Descriptive statistics was used to analyze the closed-ended questions to generate frequency tables for further analyses according to the research questions. The data that resulted from the analysis were connected, interpreted and presented using inbuilt statistical presentation tools such as tables, pie-charts, text, and bar-charts. The researcher also utilized a Microsoft spreadsheet program known as Ms Excel to generate the above named statistical presentation tools.

Qualitative data generated by the closed-ended items in the questionnaire were analyzed using qualitative content analysis to help in quantifying emerging features, trends, and concepts. Sekaran (2005) describes qualitative content analysis as a statistical procedure employed to systematically code and analyze responses that were offered in either verbal or written communication channels to allow variables to be evaluated or measured quantitatively. The review of related literature was comprehensively decoded and the content, key words and repetitive themes decoded as (May 2001) asserts.

Results

Introduction

This particular study had been initiated with a view of evaluating the impact of the UK smoking ban on the UK Retail drinks sector since its introduction on 1stJuly 2007. The smoking ban was meant to deter individuals from smoking in enclosed public places and working places. Pubs, restaurants and other entertainment establishments had been earmarked as enclosed public places. Although the smoking ban have had an impact on other amenities, pubs and restaurants have been affected the most, with some closing down and others cutting down on costs by laying off employees.

It was therefore the purpose of this study to evaluate the impacts of the smoking on the entertainment sector, specifically the alcoholic drinks sector. Out of the 78 respondents selected to take part in the survey – 24 pub proprietors and 48 pub employees – 4 respondents refused to be interviewed during the actual interview date, citing personal reasons. It is therefore prudent to note that the study received 94% response rate. The statement of results will be presented in this section followed by a comprehensive discussion of the results based on the study objectives and hypotheses.

Statement of Results

52% of the pub proprietors were males while 48% were females. Of the 44 remaining pub employees, 62% were females while 38% were males. All pub proprietors had been actively involved in pub business years before the introduction of the smoking ban, with 20% of them saying they had been in the licensing trade for over 10 years. However, the situation was different for the pub employees, with only a third of them saying they were actively engaged in pub business when the ban was imposed. Still, they exhibited a thorough understanding of pub business and what the researcher was trying to infer.

Asked about the rationale behind the smoking bans, a massive 52% of the pub proprietors or their representatives argued that it was hurting their business establishments, while 28% said it was good for health purposes although it was decimating their takings. A small proportion argued it was foolhardy for the government to implement a regulation that will see it lose out on taxes while pushing innocent people out of employment. Only a small proportion of the respondent (2%) argued that the government did the right thing since it was wrong to smoke in public places. Interestingly those who totally supported the government’s move on smoking bans were themselves non-smokers.

The question on loss of takings proved interesting. Although all pub proprietors from both sides of the divide – affluent and less affluent – reported losing significant portions of their profits ever since the introduction of the smoking ban, it was interesting to note that the bar owners from the affluent region of the community area reported losing more than their counterparts from the less affluent region.

The business proprietors from less affluent areas reported losing between 25% and 35% of the takings, compared to the richer neighbours, who lost between 37% and 50% of the takings. The only deduction applicable in such a scenario is that the pub owners from upmarket were earning more before the introduction of the ban, and therefore lost more when the ban was finally enforced. The figure below depicts a graphical representation of percentage earnings of both groups before and after the smoking ban

% earnings in pounds before and after the ban.
Figure 3: % earnings in pounds before and after the ban.

When asked if the bar owners had approved of the smoking ban when it was still being discussed in parliament, 66% percent answered to the contrary while 20 percent said they had indeed approved the ban but they did not understand its implications by then. The rest said they did not have the interest to discuss the smoking bill at that time. This again points at the ignorance the society have towards important issues that end up affecting them in the future.

It is a good pointer as to why majority of the pub owners have been taken adrift by the smoking ban. Only 42% of the bar proprietors reported they had taken the initiative to fit their pubs with an outside smoking area when the directive came. Here, the disparity between the affluent and the less affluent areas was evident as majority (80%) of those who fitted their pubs with the equipment came from affluent region of the community area. The bulk of the pub owners who never erected an outside convertible smoking area gave varied reasons, some of which are captured below.

Reasons for not having an Outside Smoking Area.
Figure 4: Reasons for not having an Outside Smoking Area.

When it came to government policy and regulations towards the beer sector, there was agreement across board the current Labour government never had the interests of the beer sector at heart despite its contribution to the national purpose. Shockingly, a significant number of the bar owners (42%) said they will vote out the government in protest. Majority (52%) argued that the smoking bans had affected, not only the bar proprietors and landlords, but also the general public in terms of the massive job losses ever since the smoking ban was introduced in 1st July 2007. Poor policy legislation and high taxes were also cited as some of the reasons that the pub owners detested the government.

Another revelation was that all (100%) bar owners knew people in the community area and beyond who had shut down their pub establishments citing difficult operating environment due to low sales. Most individuals, the bar owners responded, that were on the receiving end had rented their business premises.

The reasons given for the massive pub closures were loss of business, changing culture where individuals prefer drinking in their homes, stiff competition, and a shrinking economy in that order. It is imperative to note that the reasons were representative of the two regions – the affluent and the less affluent. This is an important indicator that even the pub owners from richer neighbourhoods shared the same opinions with their counterparts from poorer neighbourhoods, and therefore the problem afflicting the pub sector across the country was cross-cutting.

82% of the bar proprietors knew of people who had lost their employment due to the current state of affairs, with another 46% percent responding that they knew more than three pub employees who had lost their jobs in the last two years. 30 % of the pub owners said they have been forced to downsize their employee due to the hardships they were encountering. Admittedly, the largest proportion of bar owners who had downsized their members of staff came from high affluent areas, perhaps a pointer that they had employed more staff and paid them than their counterparts from the less affluent area.

Around 62 % of the male proprietors attested they were considering shutting down their business premises if the situation will not improve in two years time. Lastly, the bar owners were asked a personal question of what out to be done to stabilize the situation before it runs out of hand. The figure below shows some of their personal responses categorized by the respondents’ socio-economic standing.

Opinions of What Should be done to Stabilize Situation.
Figure 5: Opinions of What Should be done to Stabilize Situation.

Coming to the pub employees, all respondents agreed that business had largely slowed down as fewer people were visiting the pubs. Majority (52%) said that they had lost between 40% and 50% of their customers, with only a few (12%) saying that they had lost between 10% and 20%. More pubs in the less affluent area seemed to have retained a significant number of their customers than the upmarket pubs. When asked to fill out a time line of when the situation of lack of customers was at its worst, majority (62%) chose the year 2009 as the worst year yet. This is a clear indicator that the situation is rapidly getting out of control.

All pub attendants were in agreement that the smoking and drinking scenario had completely changed since the introduction of the smoking ban on July 2007. A sizable number of the pub employees said the pub environment had turned boring, while others said they were not sure if they will keep their jobs much longer if the situation does not improve soon. Indeed, 56% of the pub employees from the affluent areas said they are no longer sure about the security of their jobs, while 42% of the pub employees from less affluent areas responded along the same line. This kind of revelation reveals the depth of problem that is bedevilling the UK retail drinks sector. It is an indicator that all is not well

Those who were actively engaged in the pub business before the smoking ban was enforced were asked if they have, at any single moment received pay cuts, either before or after the smoking ban was enforced. Shocking as it is, 66% of the pub workers answered to the positive, but not before the smoking ban was enforced. When asked a personal opinion about the effects of the smoking ban on the lives of ordinary British nationals, only a partly 8 percent conceded that it has helped preserve the environment through elimination of passive smoke. The rest of the distribution is shown below.

Effects of Smoking Ban to the Beer Industry.
Figure 6: Effects of Smoking Ban to the Beer Industry.

Analysis and Discussion

This study had been initiated to evaluate the impact of the UK smoking ban on the country’s retail drinks sector since its introduction in 1st July 2007. The smoke-free legislation criminalized the use of all substantially or wholly enclosed public places and working places for smoking purposes. As such, some category of business enterprises such as pubs and restaurants suffered negatively, and has never been able to recover to date. Indeed, according to the study findings, the situation is getting worse; with 52 pubs closing every week in recent times (BBPA, 2008).

From the study findings, it can be argued beyond any reasonable doubt that the July 2007 smoking ban has had a negative multiplier effect on the pub industry in the UK. Some of the most overriding consequences the study have been able to ascertain include loss of profitability due to reduced sales, loss of employment, pub closures, lack of job security even while in employment, and loss of clientele.

A rather shocking revelation is that pubs from affluent regions of the community area have been most affected by the ban than pubs from the less affluent areas. A likely scenario is that these pubs used to earn much more when the tides were high, and now that they have been hit by the effects of the smoking ban, their earnings have plummeted by a similar margin. Another possible suggestion would be what Marmot (2007) had suggested, that people from less affluent areas tend to live to engage in dangerous lifestyles such drinking and smoking than upmarket people. The researcher had posited that there exists a vivid association, not only between poverty and disease, but also between inequality and disease.

This study has also proved that the majority of the pub proprietors did not prepare their establishments beforehand even after the directive was issued out to prepare outside smoking areas. Although majority said it was quite expensive to have the marquees and the convertibles, ignorance and lack of willpower to prepare also played a part in bringing about the current situation. It should not escape mention that many pub proprietors in the UK fiercely fought the plan to introduce the smoking bans, and only caved in when the plans received overwhelming public support (Eadie at al 2008). The above are some of the highlights of the study.

Three research questions and a similar number of hypotheses had been formulated to guide this particular study. Below, an analysis of the results based on the hypotheses is presented.

The Smoking Ban and Loss of Livelihoods

A strong correlation between the loss of livelihoods by those engaged in the beer industry and the 2007 smoking ban was discerned after preliminary study results were generated. According to ONS (2009), the UK unemployment rate is reflected as unchanged, at 72.5%. However, things appear to be different on the ground as the study revealed that thousands of workers in the beer sector were losing the sources of livelihood by the day. All the pub operators interviewed during the study admitted to seeing at least a few people being dismissed from their places of employment while others closed down their business establishments.

According to preliminary analysis by BBPA (2008), 44,000 jobs had already been lost in the last five years, and an additional 43,000 were in the offing within the next five years if the operating environment did not change for the better. It is however sad to note that the beer industry is one of the major employers, creating 18 employment opportunities for every 3 jobs created off-licenses in conjunction with supermarkets (BBPA, 2008).

It is true that there are so many factors that come into play to necessitate the massive job losses in the brewing and pub sectors in the UK. Of course there is the ongoing economic recession, consumer spending, high taxes and poor regulatory frameworks. However, it beats logic as to how and why the second largest brewer in Britain, Scottish & New Castle Brewery, must reach a decision to close down due to lack of market for their products. According to BBPA (2008), there have been a total of 37 major Brewery shutdowns since 1997, with majority of them closing shop after the introduction of the smoking ban. BBPA, an umbrella body for beer dealers, argues that over 5000 jobs have been lost from the 37 brewery closures. According to the organization, “…this amount to over 25 percent of all brewing sector employees” (p. 5).

The above revelation clearly reveals a direct correlation between the massive job losses on the part of workers in the beer industry and the smoking ban. A significant number of pub workers interviewed during the study feared for their jobs. The situation in the beer market has reached that far – that employees no longer have security over their jobs; that many started receiving pay cuts immediately after the arrival of the smoking ban; and that many pub proprietors interviewed during the study are considering pulling out if the situation doesn’t rebound to normal in two years time. That is the situation on the ground.

It was not the purpose of this paper to criticize the July 2007 smoking ban. On the contrary, the smoke-free regulation has served very useful purposes to prevent death and illness. Stillman (1995) exposed that smoking is the primary cause of preventable death. The researcher also revealed that smoking-related diseases are involved in more than one third of all hospital admissions. It is against this backdrop that all people should be made to understand the benefits offered by the smoking ban, at least health wise. But it should not be forgotten that this study was only interested in evaluating the effects of the smoking bans on the UK’s beer industry. Consequently, the first premise has indeed been proven right; that the alcohol ban has led to massive unemployment.

The Smoking ban and Level of Preparedness

Any situation in life, no matter how small requires a certain level of preparation, and lack of preparation is tantamount to failure. This appears to be the case, whereby a majority of pub proprietors chose to ignore the directive to prepare an outside smoking area before the smoking ban took effect. In the study, only a few bar owners adhered to the directive to erect outside convertibles or marquees where smokers could shield themselves from the vagrancies of weather.

Some bar owners argued that they saw no reason to erect such expensive gadgets since people were not likely to comply with the law. It is therefore imperative to note that ignorance played a great deal in bringing about the current situation because the respondents who adhered to the rules were not complaining as much as those who did not. Still, the blame is laid on the smoking ban, a scenario that is rather precarious.

According to Cairney (2009), some pub proprietors argues that it is the government which failed the them for failure to prepare them psychologically, and even offering financial support to small family establishment that can ill afford to erect an outside smoking facility (Cairney, 2009). During this particular study, the same assertion was repeated by a sizable number of bar proprietors, with some calling for the sacking of total cabinet for letting them down at their most hour of need. Still, ignorance notwithstanding, some respondents, especially those from the lower end of society, argued that it was hard for them to raise the required capital to cater for the outside smoking amenities.

Therefore, it is safe for them to argue that the government could have chipped in to give some assistance in terms of offering subsidized outside smoking marquees or convertibles rather than letting their business establishments drown in the harsh winter weather that followed the smoking ban. Still, that is subject to discussion since the government may have had other plans. Otherwise, the second premise that no adequate preparation was done to erect outside smoking amenities since most pub proprietors could not afford the capital costs is also true. However, a conjecture needs to be added; that some pub proprietors ignorantly refused to elect the amenities.

Costs of Subsidizing versus Benefit of Pub Closures

It is the duty of governments across all civilizations in the world to protect their citizens against situations that may deem unfavorable to their own welfare. Governments provide security, feed the hungry populations, pay for basic education, and cater for the health needs of their citizens. In the latter, governments, including the UK government, spend considerable amount of money taking care of the health needs of citizens with diseases that may otherwise could have been prevented.

Cigarettes are known to bring such diseases as lung cancer, cardiovascular disease, and chest pains – diseases that are preventable though deadly. Indeed, the knowledge that smoking and alcohol kills is a matter that has been in public domain in the 21st century. The hazards posed by smoking have been well researched and documented, and scientifically proven. Still (1995) revealed that smoking-related diseases are involved in more than one third of all hospital admissions. It is against this backdrop that governments act by enforcing smoking bans to prevent people from the dangers of active or passive smoking.

There are various versions through which the UK government may have looked at the request of subsidizing outside smoking sheds if it could have been presented with such a request. Here, the cost benefit analysis could prove vital in enabling the government to reach an amicable solution. In Economics, the cost benefit analysis involves weighing or measuring the total expected cost of an action or actions against the total expected benefits of the action or any other action (Boardman et al, 2000). Both benefits and costs must be expressed in money value, and are often adjusted for the real time value of money. Although the theory has some accuracy problems, it can be used to evaluate if the UK government was indeed obliged to offer subsidies for the purchase of outside smoking amenities to prevent a possible collapse of the country’s beer industry.

Simply put, the government is not obliged to engage in such a project if its costs outweigh the benefits accrued from the project. Costs may include anything from polluting the environment to catering for hospitalized patients due to passive or active smoking and other overhead costs. The costs of polluting the environment far outweigh any benefit that a few thousand pubs or few thousand jobs may bring to the welfare of millions of people in the country who do not smoke.

Under this consideration, the UK government is not in any way obliged to pay for the subsidies as that is tantamount to paying for people to be killed – people that the government itself is under obligation to protect. Indeed, this is the same reason that the government introduced the smoking bans – to save lives. The smoke-free regulations have been able to safeguard individuals from health hazards associated with smoking, with researchers in countries such as the United Kingdom arguing that criminalizing smoking in all enclosed public places will help prevent the deaths of 40,000 individuals over the next decade (Laurence, 2008). In this perspective, the third hypothesis that the government’s wished to curtail smoking, and therefore could not fund such an exercise is proved right.

Conclusions and Recommendations

Conclusions

This study has proved vehemently that the July 2007 smoking ban have had profound impact on the UK’s pub sector, especially in terms of beer sales. Data from the field coupled with an extensive review of literature exposes a beer market that has been shaken to its knees. That not withstanding, the study found that some negative effects blamed on smoking ban are actually superficial, and do not deserve any merit at all. For instance, some pub proprietors interviewed totally ignored the directive to prepare an outside smoking facility before the smoking ban was enforced. But when issues started to get out of hand, they started blaming the government for not preparing them. In this perspective, the role of ignorance rather than the smoking ban in bringing the pub sector down to its knees cannot be underestimated.

The study identified some major areas where the smoking ban has affected UK’s retail industry, in most cases negatively. First, there are the twin impacts of pub closures and decreased sales in alcoholic products since smokers no longer visit the pubs. One particular study released in 2009 revealed that only 18% of customers could afford out of home entertainment, down from 30 % a year earlier. A recent nationwide survey reported by the Morning Advertiser revealed that two out of three consumers have made a choice to drink at the comfort of their homes rather than in pubs since the new law banning smoking in enclosed public places was introduced. As a result, an estimated 52 percent of pubs across the UK are closing each week. Consequently, the smoking ban can be accused of causing pubs to shut down and decreased sales revenue.

Third, the smoking ban has impacted negatively on job creation since it has made most pub employees to loose their sources of livelihood once pubs are shut down or when downsizing is done. Indeed, the study revealed that most pub employees are no longer secure of their positions. Since the smoking ban was enforced, 5000 brewery workers have lost their jobs, 25 percent of the total labor-force working in the brewing sector. If no amendments are made on the smoking ban, an estimated 40,000 workers in the pub sector will lose their jobs in five years time. Already, a considerable amount of workers have been laid off. Paradoxically, the brewing and pub sector is the largest employer in the UK, directly employing over 600,000 employees.

Fourth, the smoking ban has occasioned pay cuts for employees working in the pub sector of up to a third of their payouts. This is despite the rising costs of living and the ongoing economic recession. While trend in other sectors and industries have been towards pay hikes, this cannot be said of workers in the pub sector. A significant number of pub members interviewed in this particular survey attested the fact that they have had to deal with significant pay cuts or risk being thrown out of employment.

Such a revelation clears any doubt that the situation in the pub sector is really grim. Fifth, the smoking ban has occasioned the pubs to lose clientele, a situation that have had a multiplier effect, affecting even the brewers due to low alcohol consumption patterns. Indeed, alcohol consumption is at its lowest, courtesy of the smoking ban since the customers prefer drinking from the comfort of their homes. Breweries have also shut down, with the latest casualty being the second largest brewery in England – Scottish & New Castle Brewery of Reading.

The study also revealed that, despite popular belief, pubs in more affluent area have affected more by the effects of the smoking ban than pubs from less affluent areas judging by the dip in their profitability. In the study, pub proprietors from affluent areas reported greater losses in profitability than their counterparts from less effluent areas. This may be because these pubs used to get bigger profits before the introduction of the smoking ban. Likewise, when the ban was introduced, their profits dipped by similar margins.

All the three hypotheses were proved right. First, a direct correlation between loss of employment and the smoking ban was proved right. Second, the study proved that pub proprietors failed to prepare themselves beforehand, preferring to ignore the directive to erect outside smoking amenities. Majority of them were caught off guard when the smoking ban was finally enforced. Accordingly, ignorance and failure to comply with the guidelines are also factors that have contributed to the current situation. Third, the UK government could not provide the subsidies bases on a cost-benefit analysis.

The duty of the government is to protect life, not to aid death. Furthermore, the benefits received from protecting some few thousands from collapse and some few thousand workers from being laid off are far much outweighed by the costs of preserving the environment and protecting life.

Recommendations

The study findings clearly reveal that the July 2007 smoking ban is clearly to blame for most of the woes bedevilling UK’s pub sector ever since its introduction. That not withstanding, the microenvironment has also greatly contributed to the woes. Externalities such as the vagrancies of weather and the 2008 economic recession have all contributed to the dismal performance of the pub sector in recent years. As such, the first recommendation would be to call upon the UK to cushion the industry against external factors such as tough weather and economic recessions. The UK has rushed to assist other sectors of the economy to stand up when external factors are so hard on them; it should do the same to the beer industry. However, any attempt to reverse the gains made by the smoking ban should be resisted at all costs.

It should be remembered that the beer sector is the largest employer in the UK. As such, it must never be left to collapse under the heavy weight of the smoking ban. The second recommendation therefore would be for the UK to set up some form central revolving fund or scheme through which all pubs in the UK are supposed to contribute and draw money from when times threaten to get out of hand. Here, the role of the UK is to act as the guardian and distributor of the funds to deserving cases. As a sign of good will, the government can make a contribution towards the revolving fund of several million of pounds, then all the other contributions comes from pubs that have subscribed to the central fund. That way, the ailing industry gets assistance, but the smoking ban still remains.

The third recommendation is for the government to offer training programmes to the pub operators to assist them manage their business establishments with the professionalism deserved. The study findings revealed ignorance and disregard of existing regulations as some of the factors that have fuelled the current state of affairs. For instance, sales could have been much better if the pub operators agreed to go by the set regulations and erect outside smoking amenities. To claim that they felt smokers would never comply with the smoking ban, and therefore saw no need to erect outside smoking areas, is an idea that holds no water. In that perspective, it is imperative for the government to offer training to the pub operators, especially in areas of following the laid down procedures and frameworks.

The fourth recommendation would be to request the pub operators across the UK to cut down on unnecessary costs, especially during the current period when beer sales have hit rock bottom. The operators have the capacity to liberate themselves by professionally running their businesses and ensuring that unnecessary costs are identified and done away with. Tough times call for tough measures; that should be their guiding principle. One of the measures is to do away with unnecessary capital costs.

The last recommendation would be for the UK to chip in and reduce the taxes on beer and licences so that the beer industry gets back to its knees. Presently, the government is acting tough on the beer industry, threatening to add more taxes on breweries and the pub sector. But due to the current situation, it is counterproductive for the government to add more taxes to the sector when it should be offering financial incentives. Adding more taxes will only assist in sending more people to the streets since the situation really looks grim. On the contrary, the government should provide more incentives in the form of tax reductions and tax breaks. When all the above recommendations are flowed, the pub sector in the UK may soon be back on its knees; and pub closures may soon be a thing of the past.

Future Research Areas

Further research is needed in a number of areas to ensure that such a scenario will never happen again in any other sector of the economy, not only in the beer sector. First, extensive research needs to be undertaken on how the UK should be introducing new laws and regulations that are likely to shake key sectors of the economy to the core. From the experience of the smoking ban, it is evident that something went amiss during the implementation phase. It is of no use to speculate on what went wrong; but clear policy frameworks must be drawn through extensive research on how to implement rules and regulations that are likely to have a long lasting influence on the lives of people.

Further research should also be directed at coming up with ways and means through which the inequality that exist between the on-line trade and supermarket sales is dealt with to ensure a fair playing ground. In many occasions, the pub sector has cried foul over the cheap liquor sold in supermarkets as customers prefer to buy the cheap liquor and drink at home. This effectively locks out the customers from visiting the pubs since they can always get what they want from the supermarkets, and at relatively cheaper prices since supermarkets since the supermarkets pay little tax on alcoholic drinks and are exempted from the smoking ban.

Under such circumstances, the pub sector end up losing out. It is against this backdrop that further research needs to be carried out to harmonize the two industries so that one does not benefit at the expense of the other.

Lastly, further research needs to be carried out on why breweries in the UK are closing down at a very rapid rate. It is not usual for established breweries such as Scottish & New Castle Brewery, based in Reading, to suddenly announce that they are closing down. There have been 37 brewery closures from 2007, a situation that suggest that something is amiss. It is therefore imperative to conduct further research in that area to come up with the real underlying factors behind this worrying trend. All in all, the UK’s pub sector must be prevented at all costs from collapse due to factors that can be prevented.

Concerted efforts must be made from all quarters to ensure that the sector is back on its feet. If no efforts are made directed towards the recovery of the sector, many more pubs will close, breweries will shut down, and the streets will be littered with tens of thousands of unemployed, unproductive people. The buck stops with the authorities.

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Footnotes

  1. John Davis, the owner of Plough in, Kent, wanted to petition the government due to loss of sales amounting to 25 percent of his takings. He wanted the UK smoking ban overturned (BBC News, 2007).
  2. Brett Russell, the proprietor of Saltmbocca’s restaurant disclosed that the smoking ban was the main factor that made him shut down his business. He was encountering losses of about 40 percent of his business takings (Hitt, 2008).
  3. “You couldn’t get a packed bar these days unless there’s a funeral or some other big event” – Remarks of Maureen Kirwan, a pub proprietor (Lister, 2007).
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