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This paper is the first to estimate the economic impact of a comprehensive smoking ban in all enclosed public places of work, on bars in Ireland. The demand in bars, represented by a monthly index of sales volume, is explained by relative prices in bars, prices of alcohol sold in off‐licences and the aggregate retail sales (ARS) as a proxy for general economic activity and incomes. The smoking ban is included into the model as a step dummy and the modelling is done using ARIMAX strategy. The results show a reduction in the volume of sales in bars by −4.6% (p<0.01) following the ban. Copyright © 2011 John Wiley & Sons, Ltd.