United Kingdom: Belhaven, the Scottish brewing and pubs group, said on November 29 it was preparing to overcome the challenge of first minister Jack McConnell's smoking ban by introducing outside "comfort" zones for smokers featuring shelters and heaters. Stuart Ross, chief executive, said the clampdown on smoking in public places could mean that around one in three community pubs in poorer areas where smoking is most preval-ent would be forced to close. Outlining his plans for the first time since an all-out ban was announced earlier this month, Ross admitted there would be a "tricky transitional period" to manage.

However, he added that by providing decent outdoor facilities to keep smokers coming to its outlets, Belhaven could gain a competitive advantage over its rival pub operators. East Lothian-based Belhaven, which has just celebrated selling its 100 millionth pint of flagship ale Belhaven Best, is dispatching a fact-finding team to Ireland next month to assess the first year's impact of smoking restrictions in the republic.

The company will then examine its own estate pub-by-pub to determine how the effects of the ban can be mitigated. Ross also used yesterday's first-half results presentation to accuse the Scottish Executive of pressing ahead with the legislation simply for the sake of devolution. He said: "The Scottish Parliament has made very little impact on Scottish people since it came in and has just spent £400m on a debating chamber. "Its powers are restricted and McConnell has pickedmthe issue of health and hung his political hat on that peg."

The smoking ban north of the border will apply to all enclosed public spaces, while the proposed restrictions in England and Wales will only be applied to those pubs where meals are served. Belhaven has earmarked funds for changes to its 98 managed pubs. It believes each shelter could cost £3000. It could also look to help landlords with similar plans at its 157 tenanted outlets.

Ross revealed that Belhaven is planning to reassess its focus on Scotland to drive growth and would be reviewing its strategy in the next couple of months. He said a further announcement would be made when appropriate. However, Ross said shifting attention south of the border for future pub acquisitions would be difficult because high demand from rival operators has pushed up the cost of buying licensed premises. Instead, he said the com-pany was well equipped to cope with the changing business environment, adding: "People will have to get used to not smoking in pubs."

Scotland's largest independ-ent regional brewer has added another eight outlets since the end of the half-year, taking its estate to 263. First-half figures showed pre-tax profits rose 27% to £9.7m in the 26 weeks to September 26 on turnover of £56.8m. Both pubs and drinks divisions produced strong results with operating profits up by 32.3% and 10% respectively. Belhaven said trading since the start of October had been in line with first-half trends, leaving it on track for a 15th year of higher sales and profits.City analysts and investors welcomed the upbeat statement and Belhaven shares closed up 16p at 437p.
Belhaven raised the interim dividend pay-out for shareholders to 4.35p a share. James Dawson, at broker Charles Stanley, said: "Belhaven appears to be on target to continue its pub estate expansion despite concerns over the smoking ban."

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