Posted: 11/28/07
How's business? Local update on effect of smoking ban
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By Patrick Tepoorten
Almost two months have passed since state legislators passed the Freedom to Breathe Act, which banned smoking from all restaurants and bars in Minnesota. The Post Review polled a number of bars in its coverage area to see how it's going. Just short of 60 days in, establishments reported varying degrees of drop-offs in sales.
Perhaps the most pronounced effects were reported in Rush City, where both the Rush City VFW and the North End bar reported that business has been "terrible" since the ban took effect Oct. 1.
Carol Hanson, manager of Rush City's North End bar, said business wasn't very good before the ban, but is "awful" now. Although she didn't have October numbers available yet and therefore could not get into specifics, she expected sales to be specifically down and for November's to be even worse. And, as temperatures get colder yet, she is fearful sales will drop off even more.
At the Rush City VFW, manager Corrine Scheele said business is down more than a third, but added that October usually sees a drop-off in business. "It's a bad time of year," she said.
One area where Scheele and Hanson reported decreased sales is with regular customers, who, in many cases are buying 50 percent fewer cocktails than before Oct. 1.
Eagles manager Sandy Pearson reported less of a slow down, and like Scheele attributed only a portion of it to the smoking ban. But, like Scheele, noted that there has been discussion of cut backs to hours and shifts if trends continue in the same direction.
Contrary to reports from Rush City, Harris' Big Daddy's owner Jill Novalany noted only a "little bit" of a drop off. "We've had a few slow weekends," she said, but attributed them primarily to hunting season and other seasonal factors.
Novalany added that she wasn't terribly concerned with a negative effect from the smoking ban, and added that the atmosphere in the establishment is much improved. "I like it. There's no more stinky, yellow clothes, no yellow walls. I really like it," she said, adding, "It will be a good thing for everybody in the long run."
In North Branch, JJ's Bowl owner Glenn Gruber said business has been horrible since the ban took effect. "If I told you the numbers you wouldn't believe it," he added.
Gruber, who usually uses increased business at this time of year to put away money for slow times the following summer, said he has been unable to put any money aside this year. And, although he stated in no uncertain terms he has no plans to cut hours this winter, if things don't improve, "things could be hell around here next summer."
Gruber had harsh words for the ban, calling it "a joke," and noted that bars and smoking go together. "Minnesota is not good for business," he concluded.
Nearby at the Olde Brick Inn, owner Geno Williams said he felt business post ban was not as bad as he expected. "I thought we'd be hurt more," he said, and added that while weekends have been steady, slow downs have occurred with weekday traffic. Nevertheless, he said "We're hanging in there."
Williams did note a 20 percent reduction in sales from October 2006 to October 2007, but felt his sales had bounced back to normal in November.
Contrary to one of the ban's primary goals of creating a cleaner work environment for employees, Williams said it is his staff, most of whom are smokers, that has been hit hardest by the ban. He did acknowledge though, that one bartender has quit smoking since the ban took effect.
On a personal note, and despite the fact his business seems to be suffering little ill effect, Williams said he felt the ban is "offensive" to bar owners. He further noted that, while the state has made it impossible for bars to allow, and profit from, smoking, the state itself hasn't stopped "cashing in" on the habit through the collection of taxes.
Further south yet, Stacy Liquor Operations Manager Brian Hachey said business at the municipal bar was off about 4 percent between October 2006 and October 2007, but wasn't prepared to attribute the slow down to the ban. Rather, he felt it is part of an "overall cultural shift."
"There are a lot of contributing factors," he said, including the season, and the state's decision to reduce the drunk driving threshold to .08.
Tavern League of Minnesota Executive Director Kenn Rockler, who is also the executive director of the Bowling Proprietors Association of Minnesota, and lobbied against the ban at the state level, indicated that mixed results, like those found in this area, are to be expected.
"There is no reason to say the sky is falling yet," he said. But, although he did say it is too early to look at hard statistical data, "anecdotally there are people frightened for their very livelihood."
Rockler cautioned though, seeing any potential bar closings strictly as a result of the ban. Often there are pre-existing financial problems that were only exacerbated by the ban.
As well though, he cautioned that bars doing better in the face of the ban might have mitigated reductions in sales through price increases, which can mask decreases in sales by producing flat revenues.
Of the greatest areas of concern this early in the ban, Rockler noted that bowling centers seem to be feeling the pinch especially, and that pull tabs sales have "crashed."
Both Rockler and executive director of the Minnesota Municipal Beverage Association, Paul Kaspszak, agreed that the results of the Post Review's informal survey, which has some establishments surviving nicely while others claim to be suffering significantly, are similar to what their organizations have been hearing from members.
"There is a wide variety of things going on," said Kaspszak. "It's been a mixed bag depending on where they are at."
Kaspszak, whose organization remained neutral in the political battle, noted that, in areas of the state where artificial borders had been created by local smoking bans, some bars are seeing customers return after having left for establishments that allowed smoking.
He also noted that, while some members are taking a "sky is falling" attitude toward the ban, others have been proactive, improving business by improving facilities, and in at least one case, by studying the habits of smokers and trying to apply those habits - such as needing something to do with the hands - by making snacks and games more readily available.
Customers have adapted to the new law pretty well too, said Kaspszak. There have been some minor issues, such as what patrons are expected to do with drinks while they are out smoking, but overall the change has been relatively eventless. But Kaspszak noted it is early and how smokers adapt to the overall ban will be much better determined after the winter.
While many things have happened as a result of the ban, Kaspszak did note something that has not happened: a rise in non-smoking patrons. "The argument that said business would get better because non-smokers would come is not panning out anywhere" he said. "During the debate, when businesses were saying they were going to lose big, a lot of non-smokers that don't go out were saying ‘I'll be there,' but there has not been a significant push by non-smokers to offset the declines."
Kaspszak has not given up hope on non-smokers just yet though, and took advantage of the opportunity to challenge non-smokers to "live up to their end of the agreement," by patronizing non-smoking establishments.
In an upcoming second installment of this series, the Post Review will be examining the effects of the ban on the business of bars along the Wisconsin - Minnesota border. In a third, the Post Review will try and determine how patrons, smoking and non-smoking alike, are affected by the ban. In a final installment in the spring, the Post Review will return to these same businesses and see how they fared in the winter months.
Comment from Lyle Johnson, 12/6/07
Brian Hachey's comment on the state's decision to lower the BAC to .08 effecting business shows how out of touch he is with this issue. The lowering of the BAC to .08 was mandated by the federal government, and in fact Minnesota was the last state to adopt it. While not adopting it, Minnesota lost millions of highway tax dollars as a consequence. As a point of reference, consider the following - A 170-pound male typically would have to consume more than four drinks in one hour on an empty stomach to reach a BAC of .08. A 135-pound female typically would have to consume three drinks in the same time frame.
If the Stacy Bar and Grill needs their customers to drink more than that to show a profit it must have a very poor business plan.
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