Smoking Ban Economics

This month, Poland will become the 11th EU member state to ban indoor smoking in areas of work, following in the footsteps of the UK, Ireland, Holland, France, Italy, Slovenia, Latvia, Sweden, Finland and Bulgaria. The law is the result of an EU initiative that seeks to ban smoking within the EU in workplaces by 2012.

The national smoking ban in Poland was voted into the law registry on 14 May by the Sejm after undergoing a series of revisions. It goes into effect after six months in the law registry, on 15 November 2010. The first version was a complete ban on indoor smoking in workplaces; the fourth version, which passed with 217 votes for, 165 against, and 48 withheld, allows for smoking exceptions in designated, enclosed areas. The ban encompasses many former smokers’ havens, like bars, pubs, cafes and nightclubs. The exception: in places with two or more rooms, smoking can occur in one of them, so long as the area is separated from the other room(s) and has an adequate ventilation system (which bar owners have said cost between 20,000 and 50,000 złoty). In places of mass transit or service vehicles (such as taxis and buses), public places used for relaxation, children’s playgrounds, or at mass transit stops and stations, the smoking ban is in full effect.

The penalty for lighting up where it is prohibited is claimed to be a 500 złoty instant fine for the smoker. Business owners will be fined 2,000 złoty for failing to display information about the smoking ban in their venue or vehicle. As for whether Krakow bar owners will be fined for smoking on their premises, there is no information on that point as of yet. This has led to understandable frustration from business owners at the fact that little has been done to inform the public about such a possibly significant change. One source asked, “What am I supposed to do? Kick smoking clients out on the street?” A spokesman for the Municipal Police of Krakow, Marek Anioł, had no official position as of yet from the commander-in-chief on how to interpret enforcement of the law on this point.

So then the question remains, are people really going to stop smoking in bars? And if so, will that impact local businesses?

While most studies suggest no negative economic impact on businesses after a smoking ban is imposed, an article in Forbes by Dr. Jonathan Tomlin pointed to the shortcomings in such statistics and found statistically significant results to the contrary: the market value of the hospitality sector dropped as a result of a proposed ban in India. Dr. Tomlin felt that targeted or partial bans, like the one passed in Poland, can be “particularly harmful to those establishments subject to the ban, as they lose business to competing firms that don’t face the ban.” These findings could mean negative effects of a partial smoking ban in Krakow, where a good proportion of the nightlife literally takes place underground. Then again, a study using stock market values might not translate well to a place where a significant portion of the affected hospitality businesses are privately owned.

There seems to be an aura of optimism as to whether the ban will affect individual bars in town. Jakub Grzgorzek, owner of the Fundacja Bulwary Sztuki, which is opening a gallery and cafe/bar on ul. Mostowa, assured the Krakow Post, “people will still go out to bars. It’s not as if they’re just going to stay home as a result”. On two separate occasions, bar owners with whom I spoke (both smokers themselves) alluded to the fact that the ban will probably create a positive feeling of community amongst smokers. One quipped that people will now be mingling on smoke breaks outside, as opposed to where acquaintances are now often made in a bar: in the toilet queue.

While the bans are uncontested as positively affecting both non-smoking customers and employees, the negative effects warrant a mention as well. When speaking with citizens from countries where the ban is enforced, like the UK and Ireland, they cite more litter on the streets, blocked sidewalks, more noise outside (which can be problematic for bars in residential areas), people drinking illegally on the streets, and possibly an increase in drugging due to people leaving their drinks unattended while outside smoking.

As for the health effects, an article in the Independent cites a report from 2008, which claims that enforcement of a nationwide smoking ban in England triggered the biggest fall in smoking ever seen there: “More than two billion fewer cigarettes were smoked and 400,000 people quit the habit since the ban was introduced a year ago, which researchers say will prevent 40,000 deaths over the next 10 years.” It will be interesting to see what the health effects will be in a country where reportedly nine million Poles, or almost a fourth of the population, regularly smoke 15-20 cigarettes a day.

It might be said that Poles generally have an inclination to resist taking away their rights. One source scoffed at the law saying, “Thanks for taking care of my health for me… maybe next year they’ll ban cars from driving on the streets,” drawing a parallel between the ban and the dismal outdoor air quality in Krakow.