County study cheers smoking-ban backers

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September 26, 2005 // UPDATED 1:58 pm - April 26, 2007
By: Jeremy Stratton
Jeremy Stratton

Liquor and food sales increased in Minneapolis bars and restaurants after countywide and citywide smoking bans took effect March 31. That's according to a study of 497 establishments by Hennepin County to measure the impact of the ban. However, the study does not draw any conclusions about whether the ban has helped or hurt businesses.

In Minneapolis, liquor sales went up 4 percent from the second quarter of 2004 to post-ban 2005, with food sales rising more than 10 percent, according to the study.

Hennepin County led the metro area in increased food sales, 6.2 percent, compared to a .08 percent decrease in Ramsey County -- where ban opponents have said their customers are fleeing because of a less-stringent ban allowing smoking in bars that with over half their sales from liquor.

Liquor sales increased only 0.15 percent in Hennepin County -- a lower rate than the 3.6 percent increase from 2003-2004 or the 1.6 percent gain in 2005. Ramsey County saw only a 0.5 percent increase from 2004-2005, while Anoka county posted a 7.4 percent gain.

The study "cannot definitely prove or disprove whether any change in taxable sales... was due solely to [the Hennepin County ban]," the report states. Numbers could also have been influenced by the economy, weather, consumer preference, and food and liquor prices, it cautions.

The study does conclude that smaller businesses were more likely to see a decline in liquor sales, which they were less likely to make up with food sales.

Carol Lynn Miller, president of the Minneapolis Hospitality Association, said that self-reported impact statements from 14 bars paint a bleaker picture: liquor sales down 27 percent and food sales down 11 percent. None of the 14 bars was in Downtown.

County Commissioners took four to five earlier impact statements into account in their consideration before the study. County Budget & Finance Director Dave Lawless said the statements might be appended to the study but would not be included in the findings.

Lawless cautioned that the self-reported numbers could be skewed, reflecting only the hardest-hit bar owners rather than a broad sample.

Miller challenged the county's findings, saying the study was rushed. "I don't think, in the period of time given, they could come up with an accurate statement," Miller said. "Ours is more relevant to the questions [County Commissioner Peter McLaughlin] had."

McLaughlin -- considered the swing vote on the issue -- had asked for quick turn-around on the study, while other commissioners favored immediate action on the ban or a more complete study over a longer period of time.

If the county repeals or weakens its ban, Minneapolis bars would still be smoke-free because of the city prohibition, but smoking competition would be closer to their doors.

The study admittedly excludes health impacts, but proponents of the ban have released numbers of their own. The Minnesota Partnership for Action Against Tobacco (MPAAT) reported that a 10-bar study in Hennepin County showed a 99 drop in air pollution from secondhand smoke after the ban, while 11 Ramsey County bars saw only a 30 percent drop.

Robert Moffitt, communications director of the American Lung Association of Minnesota, pointed out that the Minnesota Department of Employment and Economic Development reports a 2 percent increase in hours worked in Hennepin bars from the second quarter of 2004-2005. (State officials could not be reached for confirmation).

"This does not sound like the 'empty bars' we have been hearing [about,]" Moffitt said.

Moffitt also pointed to a study by the Society of Actuaries on the economic costs of secondhand smoke, in terms of medical costs and lost wages, services and fringe benefits. Adjusted for Hennepin County, that cost is more than $38 million per year, Blue Cross/Blue Shield of Minnesota confirmed.

Speaking before the report was released, Moffitt predicted that, while a few individual bars may see lower revenues, Hennepin County numbers would tell the same tale as a recent, similar study in Bloomington -- little net loss for establishments.

Miller said that bar owners most hurt will have until Oct. 15 to file bankruptcy before federal bankruptcy laws change. "After that, they'll lose everything," Miller noted.