UK Hospitality to challenge ‘sky-high’ music tariffs for bars

Trade association UK Hospitality will launch legal action against Phonographic Performance Limited (PPL) over the licensing firm’s decision to introduce a recorded music tariff in UK venues next month.

A new tariff on music events at UK venues could put bars and pubs out of business

UK Hospitality and the British Beer and Pub Association (BBPA) will take PPL to court over its new Specially Featured Entertainment (SFE) tariff, which was announced in March this year. The trade body said the legal action will “ensure that any future increases remain proportionate and affordable for businesses”.

The new tariff, which will come into effect on 1 July 2019, relates to the playing of recorded music in public at events such as discos and DJ nights and applies to nightclubs, pubs, bars, cafes, restaurants and hotels.

Changes to the tariff fee include increases in direct proportion to the size of the audience (measured in bands of 25 persons) to ensure “SFE events with different audiences are treated fairly and consistently”.

Two new smaller tariff bands will also be introduced for SFE events with attendances of one to 25 and 26 to 50 individuals to guarantee that licensees with small events will initially pay less for such events than they are paying under the current SFE tariff.

It will also include the phased introduction of increased fees over a five-year period from July 2019, based on an initial rate of 4p per person per hour (up slightly from the current average of 3.9p per person per hour). This will move to fees based on a rate of 9p per person per hour by 2023 (subject to annual indexation), which will provide licensees with time to adapt to the increases.

At the time, UK Hospitality warned that the UK’s hospitality sector could face a collective bill of more than £49 million (US$64.6m) as a result of the tariff.

The trade body also said that the new tariff could put pubs, bars and nightclubs out of business.

‘Exorbitant levels’ 

UK Hospitality chief executive Kate Nicholls said: “Significant increases to PPL’s tariffs will be devastating for many venues already struggling to cope with increasing costs.

“Margins are shrinking, costs are increasing and many venues simply are not going to be able to pass these costs on or swallow them. A huge hike in PPL fees will mean some businesses will be strangled and there will be much less choice for customers.

“UK Hospitality has been leading the fight to ensure that any increases remain fair, proportionate and affordable.

“That is why we are spearheading a legal challenge, alongside the British Beer and Pub Association to make sure that fees cannot be arbitrarily raised to exorbitant levels.

“Pushing PPL fees sky-high does nobody any favours. If venues can no longer afford the cost of a licence, PPL is, ultimately, shooting itself in the foot.

“A constructive relationship between ourselves, PPL and venues is mutually beneficial and we will continue to work towards that. We all need to be working harmoniously, and that means not gouging venues unfairly.”