Members on the right - including Nigel Farage - were quick to form conclusions for the future of UK pubs saying it would be the end of them. Seems a exaggeration at best - NHS estimated only 13% of the UK population smoked in 2022 and has been on a one-way decline (see below). JD Weatherspoon's founder - a UK and Irish pub company - commented he doesn't see big impact while trade body, UKHospitality protested "you only have to look back to the significant pub closures we saw after the indoor smoking ban to see the potential impact it could have". On latter we'd note that 2007 introduced indoor ban was when over 20% of UK adults smoked.
How much of the regulation will extend to vapes seems unclear from the Sun's source piece, but some other sources have reported they are not being considered for any outdoor bans. We'd note vaping even indoors is still legal in the UK - though many operators of venues choose to ban it. On Cannabis, it is still illegal in the UK (despite having reported lower health and social costs) and there is no indication Starmer is open to legalisation. It hasn't stopped UK headquartered tobacco co's (like BAT) from investing in it. Germany was the most recent in the EU to legalise but (as far as we know) we are still short of any pure-play cannabis credit issuers (unlike in $s).
- Tobacco exposed: 12% of Imperial's revenues are from the UK and indicative of significant market share. Japan Tobacco has a 44% market share but contributes small amount to group revenues (Western Europe as whole is only 23% of Tobacco sales).
- Less exposed: BAT revenue looks small with UK market share at only 8%, PM indicative to us is small, Altria none.
- Pub exposed (we question size of any impact); Stone Gate (STONPB) in €/£ HY, Punch Pubs (PUBLN) in £HY and Marstons (MARSLN) in £HY.
