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The economic impact of smoke-free policies in the hospitality industry

By Michelle Scollo - posted Wednesday, 16 April 2003

While smoke is rapidly clearing around Australia's offices, homes and restaurants, misinformation flies thick, fast and furious in the fight to stave off clean-air policies in hotels and clubs.

Following the introduction of legislation in the ACT, all Australian states and territories have legislated to outlaw smoking in indoor dining areas. With legislation currently under review in several jurisdictions, hospitality industry groups have mobilized nationally to oppose, delay, and water down proposals to extend legislation to bars and gaming areas.

Health groups and labour unions representing hospitality industry workers, on the other hand, are pushing hard for a widening of smoke-free laws on the grounds of employee and public health and safety.


Absent in the debate has been the tobacco industry itself which, having abandoned strategies to deny the health effects of passive smoking, has in more recent years resorted to inflaming fears among proprietors about the financial impact of such smoke-free policies.

Previously secret documents made public under the terms of settlements between US attorneys general and US tobacco companies reveal a well-thought-out strategy to recruit hospitality interests world-wide in order to persuade proprietors to invest in expensive air-conditioning solutions in preference to simple cost-free policies requiring patrons to simply "slip outside" to smoke.

Smoke-free policies in workplaces have significantly depressed tobacco consumption and cigarette sales, and it is thought that a similar extension of policies to the hospitality industry represents a serious business threat to that industry.

It is not difficult to understand why hospitality industry associations have so enthusiastically taken up the tobacco industry's interests in this area, and there is much speculation and considerable evidence from the US at least, of close financial ties.

With the bald-faced gall of an Iraqi Information Minister, hospitality industry spokesmen around the country have been claiming that bans inevitably wreak havoc on sales and will put clubs and pubs out of business. Much of the "research" here is an exercise in measuring the fear created by the industry's own propaganda. The majority of studies quoted in attempts to oppose smoke-free policies are based on surveys of proprietors' opinions or predictions about the likely impact of bans. These surveys have been conducted after proprietors have been subject to months of scare mongering but before they have any experience of such policies.

Studies which have re-surveyed proprietors a year or so after the introduction of such policies have found that fears are unfounded. A comprehensive review of all the available evidence on the economic impact of smoke-free policies in restaurants and hotels was recently published in the international British Medical Journal's Tobacco Control. This review found that none of the 35 studies concluding a negative economic impact was funded by sources independent of the tobacco industry and none of these studies used objective data, such as sales or employment figures.


To accurately assess the impact of smoke-free policies, regulators need to look at studies using independently collected sales data that incorporates controls for random fluctuations, seasonal variation and changing economic conditions. With all 21 of the well-designed studies concluding that smoke-free policies had no negative impact on revenues or jobs, policy-makers can act to protect hospitality industry workers and patrons from the toxins in secondhand smoke knowing there will be no adverse economic impact.

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About the Author

Michelle Scollo is Co-Director of the VicHealth Centre for Tobacco Control.

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