'Unjustified, unsustainable and unacceptable': Trade bodies unite against PPL fee hike

The British Beer & Pub Association (BBPA), the Bar Entertainment & Dance Association of Great Britain (BEDA), the British Hospitality Association (BHA), and the Association of Licensed Multiple Retailers (ALMR) are all against the proposals outlined in a consultation by collecting society Phonographic Performance Ltd (PPL), which collects royalties on behalf of record companies.

Over the past three decades, the BEDA has negotiated the current SFE Tariff which has always worked well for all parties. This time around, PPL have argued that the value of music is too undervalued, and have propsed significant increases in the tariff.

“There are simply no grounds for the proposed increases which will affect tens of thousands of hospitality businesses,” argued Brigid Simmonds, BBPA chief executive. “At a time of economic hardship for pubs, we do not need these additional pressures.”

“PPL are at risk of abusing their monopoly position as the sole provider of copyright recorded music in the marketplace. We hope they will listen to the wide range of voices on this issue, and we would welcome further dialogue with them as soon as possible.”

From June 1990 to date, the SFE Tariff rates have risen by 85.6 per cent with year-on-year increases at a constant 2.99 per cent. The percentage increases proposed in the latest consultation range from around 1,500 per cent to over 5,800 per cent, depending on the type of venue and usage.

Kate Nicholls, strategic affairs director for ALMR, said: “PPL’s proposals are a clear and unprecedented threat to our industry and it is only right that all parties have come together to fight them.

“With average increases for late night bars and pub restaurants of 2500 per cent, PPL’s plans are nothing short of unsustainable.”

The four organisations are also highly critical that PPL did not seek the views of industry prior to releasing a consultation which proposes such far reaching effects on businesses in the leisure and late night entertainment sector.

John Hayes, chairman of BEDA, believes the PPL’s proposed increases are “wholly unjustified, economically unsustainable and totally unacceptable,” while Martin Couchman, deputy chief executive of the British Hospitality Association, believes they would have a “serious impact on many of our hotel and restaurant members.”

In their official submission, the trade bodies say:

• The excessive proposed fee increases are unfounded and not supported by the FTI Choice Modelling Study commissioned by PPL, which focuses on the value of music as perceived by consumers without ascertaining the impact on businesses and the overall market for SFE
• The changes proposed to the structure of the SFE Tariff would render it unfair and more complex to administer
• If there has been any material change to the market, this should lead to a reduction in the current SFE Tariff, not an increase.

The joint response is also supported by a number of licensee organisations including the Scottish Licensed Trade Association, Pubs of Ulster and the Federation of Licensed Victuallers Associations.