Tobacco Scam: Smokefree Restaurants: Fake Economics - Cooking the Books

Beverly Hills, California

Big Tobacco strategy:

Create a hospitality front group to disguise Big Tobacco involvement.
Predict business losses in an attempt to block smokefree measure.
Fabricate business loss claims after measure goes in effect.

Beverly Hills, California, 1987 — the first place Big Tobacco fabricated a restaurant front group to oppose a smokefree measure.

Beverly Hills was the first California city to pass a 100% smokefree restaurant measure (170 California locales had already required non-smoking sections). The measure passed its first City Council reading with little opposition.

But by the final vote, the "Beverly Hills Restaurant Association" (BHRA) was shrilly predicting a sharp drop in business. Undisclosed at the time, BHRA was created by a Big Tobacco PR firm. Soon after the smokefree measure was implemented, the BHRA claimed business was down 30%. Frightened by this claim, the City Council rolled back the measure, requiring only non-smoking sections.

The Tobacco Institute ran this ad in the hospitality trade press suggesting that business tanked after Beverly Hills went smokefree in 1987. It didn't. Click on the image to view larger.

While Beverly Hills original 100% smokefree restaurant measure was in effect, restaurant revenues reported to sales tax authorities (white line) held steady. Had sales dropped the claimed 30%, they would have followed the dashed line. (Glantz and Smith 1994)

Later, review of restaurant sales tax records before and after the smokefree measure went into effect proved the 30% decline was a myth. The smokefree measure caused no business losses in Beverly Hills. Yet "The 30% Myth" invented in Beverly Hills continues to circulate.

In 1994, Barry Fogel, nominal president of the BHRA, wrote to the New York City Council — endorsing its plan to make most New York restaurants smokefree. He recounted the history of the BHRA:

There was no Beverly Hills Restaurant Association before the smokefree ordinance. We were organized by the tobacco industry. The industry helped pay our legal bills in a suit against Beverly Hills. The industry even flew some of our members by Learjet to Rancho Mirage, another California city considering smokefree restaurant legislation, to testify before their City Council against a similar smokefree ordinance. Tobacco Institute representatives attended some of our meetings.

The tobacco industry repeatedly claimed that Beverly hills restaurants suffered a 30% decline in revenues during the five months that the [original] smokefree ordinance was in effect. Figures from the State Board of Equalization using sales tax data, however, showed a slight increase in restaurant sales.

I regret my participation with the tobacco industry. In 1991 when I learned that secondhand smoke caused cancer, I made all Jacopo's restaurants 100% smokefree, including bar and outdoor patio areas. Even in this difficult economic climate [1994], our sales have risen.

Today, all restaurants and bars in Beverly Hills, as in all of California, are 100% smokefree.