Jan. 2 (Bloomberg) -- Spain began prohibiting smoking in the workplace as a new tobacco law takes effect this year.

Under the new law, people who smoke in prohibited zones can be fined as much as 30 euros ($36) for the first offense. A second offense can cost 600 euros and a third as much as 10,000 euros. Establishments that don't enforce the law can be fined as much as 10,000 euros. Smoking kills 50,000 people a year in Spain, 16 percent of all deaths among those aged more than 35, according to the Ministry of Health's Web site. The law may hurt sales at Altadis SA, the maker of Fortuna cigarettes, because the government aims to reduce tobacco consumption. The majority of Spaniards approve the measure, polls by El Mundo newspaper and the Center of Sociological Studies have shown. ``I like it,'' said Antonio Rios, a 25-year-old computer services worker who, like many smokers, is braving the winter weather on Paseo de la Castellana, Madrid's main thoroughfare. ``Having to stand in the cold will make me smoke less.'' Belgian Ban Ireland, Sweden, and Italy are among the European Union countries that have banned smoking in public areas. Belgium also began prohibiting smoking in the workplace yesterday. The U.K. is implementing a ban in mid-2007 and a French lawmaker has proposed considering such a measure. Tobacco companies have responded to the resulting drops in volume by raising prices. Shares of Altadis fell 15 cents to 38.17 euros at 10:32 a.m. in Madrid. They gained 14 percent last year, while the Bloomberg Europe Tobacco Index increased 32 percent. Altadis Chief Financial Officer Michel Favre said Nov. 9 the Spanish cigarette market may shrink 3 percent to 4 percent this year. Some analysts are more pessimistic: Consumption could drop 10 percent, according to Ibersecurities, a brokerage. Michael Smith, an analyst at JPMorgan Chase & Co. in London, estimates public smoking bans will lead to a drop of 3 percent to 5 percent in cigarette volumes in the first year of prohibition. According to a survey of 1,500 people by the Center of Sociological Studies, 25.8 percent of Spaniards smoke, and most began the habit before reaching the age of 18. The survey, which has a margin of error of 2.6 percent, showed 77.2 percent of respondents approve of the new law. No-Smoking Sections Under the law, bars and restaurants larger than 100 square meters need to provide separated no-smoking sections. Smaller establishments can choose to be smoking or non-smoking. The law also raises the minimum age for buying cigarettes to 18 from 16. Smoking is common in Spanish offices. Employees at banks and post offices occasionally smoke while they serve customers. Spain also is prohibiting almost all tobacco advertising. However, it's allowing motor sports sponsorship for three years, which conflicts with the European Union's directive banning certain types of tobacco advertising. Breaking the advertising ban can result in fines of as much as 600,000 euros. To contact the reporter on this story: Thomas Mulier in Madrid at tmulier@bloomberg.net.

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