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Greene King sales rise allays smoking ban fears

By Chris Mercer , 05-Jul-2006

Ale brewer Greene King said it had sold more beer than expected since smoking was banned in all Scottish pubs, suggesting the ban may not hit revenue as much as some feared.

Greene King, which bought Scotland's Belhaven brewer and pub chain last year, said year-on-year sales had fallen 2.2 per cent since smoking was banned in all Scottish pubs this March.

The brewer said the figure was "better than our internal projections", although it warned the ban had not been around long enough to assess properly.

Still, the news offers a flicker of hope to some in the brewing industry as England prepares to follow Scotland with a smoking ban across all pubs, restaurants and private members' clubs next year.

Scotland's health minister Andy Kerr recently praised consumers and pub owners' response to the smoking ban. He said 99.4 per cent of pubs, bars, clubs and hotels inspected by authorities were complying.

His comments follow a survey of 1,000 Scots by Cancer Research UK.

Nearly a quarter of those asked said they would visit pubs more because of the smoking ban. One in ten said they would go less, while most people, 45 per cent, said a ban would not affect how often they went to the pub.

Greene King warned, however, the impact of the smoking ban could be worse in winter, when outside areas at most of its pubs are likely to become less appealing.

And it added there could be no direct "read across" from the Scottish to the English ban.

The brewer, which also announced a 25 per cent rise in pre-tax profit for the full year ending 30 April, has been busy building outside facilities at its pubs across England in preparation for the smoking ban there.

Chief executive Rooney Anand said plans to cope with the smoking ban had been drawn up for a further 700 pubs. He added the firm was well prepared to "minimise the adverse impact and capitalise on the opportunities".

Greene King has also continued to make strides in the growing off-trade beer market, which may help its brewing division to offset any on-trade sales drop the smoking ban may bring.

The brewer said it sold eight per cent more beer in the 'take home' sector over the last year, giving it a 9.4 per cent share of the off-trade ale market.

This rise contributed to Greene King's continual defiance of Britain's shrinking beer market.

Top brands - IPA, Old Speckled Hen and Abbot Ale - increased sales by three, 10 and five per cent respectively during the group's full year, despite a two per cent drop in UK beer market volume.

Greene King said it had increased cask ale sales by 50 per cent since 2000, even though the cask ale market had declined by a third in that time.

The results again show how Britain's middleweight brewing sector has thrived through consolidation and strong brand marketing. Greene King's beer sales grew four per cent to £90m, while total company sales were up 16 per cent to £818m.

For more on the rise of ale brewers over the last year, click here .

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