Tobacco Documents Online

teaft Nn FWdWuKdHospiMlltl/ lndusiry ~~ t2A,'ElErR4'.QSfFi Sf[tEEI: NW.. WASH(NG"[ON. DC 200363097 20QJ331-5900 FAX: 202/331-2429 ~N ews Release NATIONAL RESTAURANT ASSOCIATION CONTACT: Wendy Webster Manager, Media Relations (202) 331-5938 Jeffrey Prince Senior Director (202) 331-5935 FOR IMMEDIATE RELEASE ECONOMIC IlIRPACT OF OSHA-PAPOSED SMOKING BAN WOULD BE STAGGERING, RESTAURANT INDUSTRY TESTIFIES • Washington, D.C. -- October 24, 1994 - The nation's restaurants will experience $18.2 billion in lost sales if a ban on smoking in the workplace is imposed by the Occupational Safety and Health Administration (OSHA), according to an analysis of consumer research commissioned by the National Restaurant Association. Testifying before OSHA today at the agency's hearings on its proposed Indoor Air Quality (IAQ) standard, incoming association vice president Biff Naylor noted that OSHA's strict smoking ban would cut deeply into the customer base of some restaurants, in turn reducing sales, impacting jobs and shrinking sales tax revenue. ~ "While a no-smoking policy would likely have little effect in a fast food facility, which sells items that can be carried out," Naylor testified, "Obviously, a tableservice restaurant, where patrons are motivated to socialize, as well as dine, would likely suffer." In May 1994, the association commissioned ICR Survey Research to conduct a survey among a random, nationally projectable sample of 1200 adult consumers, in order to quantify smoking behavior in terms of current smokers, former smokers and nonsmokers; and to -OVER-

2 assess how this behavior affects the frequency and duration of visits to specific types of eating and drinking places. The survey also sought to quantify purchase intentions regarding specific categories of food and beverages such as desserts, coffee or other hot beverages, wine and other alcoholic beverages. "Assuming smokers actually respond the way they said they would if a ban on smoking in the workplace - and that includes restaurants - is imposed, the economic impact on our industry would be $18.2 billion in lost sales, based on 1994 sales projections," said • Naylor. "That is a staggering amount, representing 6.5 percent of total foodservice sales in 1994, but that is what would result from fewer prospective visits and dramatically shorter stays, which in turn would result in fewer purchases of drinks before dinner, wine with meals, coffee and other after-dinner drinks, and dessert. " Naylor, a Los Angeles restaurateur, added that these menu items might seem like "extras" or "frills," but they are the items that tend to generate the highest profit margins, and are of critical importance in an industry where before-tax profits hover around 3 or 4 percent. • Under OSHA's proposed rule, a restaurant could build a separate room, maintain it under negative pressure and exhaust it seperately to the outside. Patrons could go into this room to smoke, but servers could not enter it. The restaurant could not serve food or drink, present a check, wipe off tables or counters or do any of the things that would make the room usable. "The rule in a nutshell says you can't work where you smoke or smoke where you work. In effect it bans smoking in restaurants," Naylor said.

LmcHng Nie FoodservicdHospiratity Industry c200 S~.1rENTEENTH STREE[: NW.. WASHINC;ION. DC 20036-3097 202/331-5900 FAX: 20?/33I-2429 N eWs Release 3 - NATIONAL RESTAURANT ASSOCIATION The National Restaurant Association, which submitted 25 pages of comments on OSHA's proposed IAQ standard in August, has pointed out that the significant loss of sales to the industry would have an outward spiral, with a loss of $913 million in sales tax revenues for state and local governments. Association economists calculated this figure based on sales tax estimates generated by the Bureau of the Census in their Annual Retail Trade Report survey. "iAtimately, such sales losses would result in job losses as foodservice operators • reduce costs to absorb reduced revenues," said Naylor. "That's more bad news for state and local governments, who directly bear the costs of unemployment compensation and lost income tax revenues. " The National Restaurant Association has requested that OSHA categorically exempt foodservice establishments from the IAQ proposal. -###-