"Outlet owners and managers need to be
the rules that apply in their market"
well-informed about
World of Heineken 38 - summer 2008
"The Irish Government introduced the ban
on smoking on March 29, 2004," says Declan
Farmer, Corporate Affairs Manager, Heineken
Ireland. "In the months leading up to the
introduction of the ban, there was a lot of
speculation about how the rules would impact
the on-premise sector in terms of consumer
numbers and beer sales. It is a common
debate in markets with a pending ban as
on-premise operators brace themselves for
an expected decline in volumes. In Ireland
these concerns were heightened as the beer
market as a whole was already in decline, and
a smoking ban would only serve to reinforce
the downward trend."
Following its initial implementation, the
smoking ban lead to a short-term drop of on-
premise growth rates, which fell four per cent
in a matter of months. However, this ultimately
levelled off after a period of 18 months.
To put matters in perspective, the Irish on
trade sector had exhibited hard to top growth
in the past. "It is still one of the largest in
the world, accounting for more than 68 per
cent of total beer consumption," says Declan.
"Additionally, Ireland has one of the highest
rates of per capita beer consumption in
Western Europe, despite declines over the
past seven years. In recent years the beer
market in Ireland has experienced significant
changes in consumer behaviour, resulting in
strong growth in the off premise sector."
Finland experienced a similar downturn to its
already declining beer market following the
introduction of a total smoking ban in June
2007. "For a number of years, we have been
seeing an annual decline in on-premise sales
of around five per cent," says Sami Asikainen,
Sales Director at Hartwall, Heineken's
operation in Finland. "From my research, I
In Italy, a smoking ban was introduced in
January 2005. "We haven't observed any
noticeable changes for bars, restaurants or
pizzerias, as time spent in these outlets is
usually limited and smokers have the option
to go outside," says Lorenzo Viganö, Heineken
Italia Manager Horeca. "Non-smokers are
spending more time in these premises and as
a consequence, consumption has increased.
The scenario is different for discos and lounge
bars where consumers stay longer than
two hours. In this case, we have noticed a
reduction of consumption for smokers."
In France, a declining volume trend at the
beginning of the year cannot solely be
estimate the rate to be an additional five per
cent since the introduction of the ban. But
many expect that these figures will bounce
back."
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