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Trade bodies unite on excessive PPL fee proposals

17/10/11


Representatives of leading industry trade bodies have united to oppose proposals from PPL for huge fee rises in its Specially Featured Entertainment (SFE) Tariff, which covers the playing of music at discos in pubs and nightclubs. The move comes in joint response to a consultation by collecting society Phonographic Performance Ltd (PPL), which collects royalties on behalf of record companies. The Bar Entertainment & Dance Association of Great Britain (BEDA) has, over the past three decades, negotiated the current SFE Tariff which has always worked well for all parties.


In their submission, trade bodies the British Beer & Pub Association (BBPA), BEDA, British Hospitality Association (BHA), and the Association of Licensed Multiple Retailers (ALMR), 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 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.


The SFE tariff was last negotiated by BEDA with PPL in 1987 and 1990. As described by PPL at the time, it was intended as a “radical reappraisal” of the tariff. It was clearly agreed between PPL and BEDA that any amendments in future would be limited to RPI increases annually unless either party raised some new factor which had not been dealt with in the 1987 and 1990 negotiations necessitating PPL to request an increase or BEDA to request a reduction in SFE tariff rates.


The BBPA and the BHA have also successfully taken action on behalf of pubs, restaurants and hotels over PPL charges in the recent past. In 2010, a High Court ruling rejected an appeal brought by PPL over the charges for the playing of background music in pubs, bars, restaurants and hotels.


Brigid Simmonds, BBPA Chief Executive, comments:


“There are simply no grounds for the proposed increases which will affect tens of thousands of hospitality businesses. 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.”


John Hayes, Chairman of BEDA comments:


"BEDA members are greatly concerned and believe wholeheartedly that PPL’s proposed increases are wholly unjustified, economically unsustainable and totally unacceptable. BEDA believes that any changes to the market necessitate a reduction in fees rather than an upward revision to the SFE Tariff. Furthermore, the current economic climate is not conducive to increased consumer spending therefore increased costs of the magnitude proposed within the PPL SFE consultation paper, if implemented fully or even in part, would result directly in the decimation of the nightclub industry."


Kate Nicholls, Strategic Affairs Director, ALMR comments:


“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. This is nothing less than a dawn raid on an industry already suffering a squeeze on margins, and one which must be resisted at all costs. With average increases for late night bars and pub restaurants of 2500% PPL’s plans are nothing short of unsustainable. They may claim that the new tariff is fair, but from where our members are sitting they are anything but – the losers will be small businesses and our customers.”


Martin Couchman, Deputy Chief Executive of the British Hospitality Association, comments:


“PPL’s proposals, if implemented, would have a serious impact on many of our hotel and restaurant members. Holiday packages including discos and dinner dances, on which many hotels depend, will be particularly badly affected.”


Notes to editors:

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


The High Court ruling rejecting an appeal brought by PPL over the charges for the playing of background music in pubs, bars, restaurants and hotels arose from the excessive charges sought by PPL and which had been roundly rejected by the Copyright Tribunal. The court ruling resulted in substantial refunds for pubs, hotels and restaurants across Britain and reverted the charges for background music to much more sustainable levels. The Copyright Tribunal reduced the average 300 per cent increase in the tariff down to ten per cent across the board.


PPL’s ‘Specially Featured Entertainment’ tariff is generally used for discos, or for whenever recorded music is played by DJs for dancing in nightclubs, pubs and hotels and similar venues. PPL is referring to the move as a ‘second consultation’, but the previous consultation was conducted five years ago and PPL took no further action on their charges as a result.


Resources

» Response to PPL Consultation on the Specially Featured Entertainment Public Performance Tariff



Tags:

Culture & Tourism, Regulation, Pubs


For further information contact:

Neil Williams
Head of Media
nwilliams@beerandpub.com
Tel: 020 7627 9156 / 07974 249 779


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