Pubs are closing at the rate of five a day. Trade body the British Beer and Pub Association says 36 UK boozers are calling last orders for the final time every week – up from two a week as recently as 2005.

Total beer sales, including the off-licence and supermarket trade, are down eight million pints per day since their peak in 1979. Pub sales, however, are down 16 million pints per day, to their lowest level since the Great Depression.

The Great British Boozer is under serious threat, and the smoking ban introduced in July 2007 is at least partly to blame. What’s more, places like bingo halls and snooker clubs are having an even worse time of it. Now is not a good time for traditional working class pursuits.

Eyes down:Bingo has been one of the ban's biggest losers

Unlike similar bans in Ireland, Scotland, and various other territories, the introduction of the English ban came shortly before the biggest consumer slowdown in recent memory. So, identifying the impact of the ban on smoking in public places as opposed to consumer belttightening over its first year or so is no simple task.

In February 2007, as the UK geared up to introduce the ban, accountants PricewaterhouseCoopers issued a paper predicting that “wet-led” pubs would suffer a loss of revenue of up to ten per cent, while foodled pubs and restaurants would see no overall impact.

Based on the experience of the Scottish smoking ban, introduced in 2006, PwC also predicted a 16 per cent fall in revenues and six per cent drop in visitors for bingo halls. Snooker and pool-led venues, the report said, would see revenues decline by between five and 15 per cent.

So, now the smoking ban has been in effect for more than a year, how does the report’s author, PwC Strategy’s head of leisure and travel, David Trunkfield, believe his predictions stand up?

“The effect on bingo has been worse than we forecast,” he says. “Revenues are down 20- 25 per cent – you can see that in the figures from the major operators.

“It’s a dual effect from the smoking ban and the change in legislation on high payout machines, which came into force through the Gambling Act on 1 September 2007. So the effect was almost simultaneous.

“The effect from the machines was almost as big as from the smoking ban – it’s about 15 per cent down from the smoking ban and 10 per cent from the machines.”

While he goes along up to a point with the idea that the bingo market, with its high proportion of retired and benefit claimant customers, is not as “cyclical” as other areas of the leisure industry, he disagrees with EN’s sweeping assertion that they are “recessionproof”.

“It relies on discretionary income,” he says. At a time when the Institute of Fiscal Studies says the inflation rate experienced by the poorest ten per cent of society has reached 7.9 per cent while for over 65s in the poorest fifth of the population it’s a whopping 9.4 per cent, that’s a big chunk taken out of the average bingo player’s income. And the Retail Price Index, used to calculate future benefit increases and many wage settlements, is running at a significantly lower rate than these “personal” inflation figures.

Nonetheless, the impact of the smoking ban shouldn’t be underestimated. And, as Trunkfield points out with reference to pubs, “Their performance started to slow down before the general consumer slowdown really took hold.”

Bingo halls make a sizeable chunk of their income from the slot machines played by customers between games. The dual effects of removing the highest-paying of these machines and those smokers who still turn up to bingo now hanging around outside during breaks rather than playing the one-armed bandits are compounding the woes of operators already seeing other smokers simply staying away.

Betting shops, Trunkfield says, have not seen any impact. “Casinos saw a bit, but not as bad as bingo,” he continues. “People are still going to casinos, but staying less long.”

Presumably the trip outside for a cigarette gives smokers a moment of quiet reflection in which to decide to cut their losses or quit while they’re ahead.

But what of the pub industry? “We said wetled pubs would be up to ten per cent down,” Trunkfield recalls. “And sales of draught beer are down eight-to-nine per cent year-on-year. Bottled beer and wine aren’t down as much. The major pub groups are down about five per cent.”

Malcolm Ireland, head of the licensing department at law firm Napthens is well-placed to observe trends in the pub sector.

He says, “There seems to be a link between heavy drinking and heavy smoking. Gastro pubs are doing well but the traditional boozer has been hit hardest over the last year or so, whatever the factors causing it.”

He says the problems faced by licensees aren’t limited to stay-at-home smokers getting tanked up on cheap supermarket lager.

“If a pub is in an area with an on-street drinking ban, it’s got an eight-man smoking shelter out the back and 20 people want to smoke, you’ve got a problem,” he points out.

And, while the problems of town centre boozers are relatively well-publicised, he says suburban pubs are facing problems too.

“The biggest thing we’ve noticed is a massive increase in the number of licence reviews following complaints about noise outside suburban pubs,” he says. “Anybody who lives near enough to a venue, or the responsible authorities, can ask the council to review a licence.

“We’re seeing conditions like outside areas not to be used beyond a certain time, and that will affect trade – if, for example, a pub is allowed to open until one o’clock but people aren’t allowed outside after ten.

“In cases like that we’d try to negotiate conditions like being allowed outside but not with alcohol.”

But, if people want to go outside and smoke a cigarette on a street at midnight, whose business is it but their own? Presumably as long as they step outside the perimeter of the publican’s property there’s no problem?

“How much responsibility the licensee has to take for what happens outside their premises is a grey area,” Ireland says. However, he believes it would always make more sense for smoking to take place within a pub’s grounds than driving people onto the street.

“If a pub has a beer garden, I believe people should be allowed to smoke in it,” he says – a practical rather than legal opinion. “Smoking is not a licensable activity – but it’s better that they’re doing it in a controlled environment than out on the street.”

Of course it’s those in the trade themselves who are best-placed to observe the effect of the ban. After all, they’ll be able to spot how many of the old regulars don’t turn up anymore.

William Lees-Jones is the sixth generation of his family to run Manchester brewery JW Lees, which operates an estate of 173 pubs, many of them in traditional high street locations.

“From January/February the sector took an absolute battering,” he says.

“We found it challenging but we budgeted for it to be challenging. We have not closed pubs any moreso than we would have in other years. We’ve sold three or four pubs out of an estate of 173.”

“The traditional customer tended to be male, older, a smoker, more profitable and less demanding than the user of the future.”

Those “users of the future”, he continues, includes families and older people primarily visiting the pub to eat.

While he says JW Lees’s cautious approach to expansion is shielding it from the worst effects of across-theboard falls in pub revenues, he believes the sector is undergoing a massive, and overdue, shakeout – especially among town centre pubs that he says by rights should have closed years ago.

Following a Monopolies and Mergers Commission report the Beer Orders were launched in 1989 to break up the estates of the large, vertically-integrated breweries that dominated the market at the time.

Repealed in 2000, the Beer Orders were supposed to see the big breweries divest themselves of many of their pubs.

“At the same time town centres were being redeveloped and the likes of Wetherspoons emerged,” Lees-Jones explains. “Within that long period about 10,000 traditional pubs should have closed, but none did.

“Now we’re seeing a very, very quick reaction and pub companies are finding pub buildings unoccupied.”

The smoking ban has clearly been a catalyst but Lees-Jones, who now appears to be on the hunt for bargains, says, “We’re now into a period where the effect of the smoking ban is no excuse. It’s more than 12 months in.”

That’s not to say he believes times aren’t going to get tougher. Anecdotally tenanted pubs, which tend to be traditional, drinks-led establishments, are suffering more severely post-ban than those operated by employees of breweries, who often concentrate on food.

“I think a lot of tenants who are paying high rents will throw the keys back at the brewery after Christmas,” says Lees-Jones.

And, when they do, he might just be putting in an offer for the freehold. “We’ve been an underbidder on a number of properties so far,” he says. “If we get a readjustment in the property market that will be a good thing.

“We’ve been careful rather than reckless, but we’re in the market at the right price. The pub market needs to go through the same adjustment as the commercial property market – but it hasn’t happened yet.”

There are many, many losers from the smoking ban. It will be ironic if a family brewery founded in 1828 that operates some of the nation’s most traditional pubs turns out, longterm, to be a winner.

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