Pub companies: follow-up - Business, Innovation and Skills Committee Contents

Memorandum submitted by the British Association of Pool Table Operators (BAPTO)

  BAPTO is a long established (1975) trade association representing suppliers of coin-operated pool tables, juke boxes, AWP machines etc.

  We gave written evidence to the original Trade and Industry Committee's (T&ISC) inquiry into Pubcos in 2004 and the Business and Enterprise Committee's inquiry into Pubcos in 2008.

  I enclose a copy of a letter and information BAPTO sent in October 2009 to each individual member of the Business, Innovation and Skills Committee (not printed here). The letter and information were sent before the Committee announced it would look into developments following its Report on Pubcos earlier in the year.

  Following this announcement we would now like the letter and information to be presented officially as evidence to the Committee for their joint consideration.

  BAPTO made submissions to the Business and Enterprise Committee (BEC) inquiry into Pubcos with regards to the AWP tie. The reason for my writing is to inform you of the present position regarding the machine tie.

  Following the BEC Report there has been months of mediation between the BBPA representing the Pubcos and other bodies representing the tenants of the Pubcos. As a result of the mediation the only concession made by the Pubcos regarding the machine tie is that they will no longer rentalise the tenant's share of the machine income. This amounts to a token gesture, the very least the pubcos think they can do to "get away with it".

  In 2004 the T&ISC recommended the "AWP machine tie to be removed" and the BEC Report four years later concluded that "that recommendation still remains valid".

  The Pubcos have no intention and never have had any intention of removing the machine tie, they totally ignored the T&ISC Report in 2004 and if they are allowed to they will do the same to the BEC Report.

  While the mechanism of the machine tie remains, any loss suffered by the Pubcos by not rentalising the tenants machine income can be more than made up for at a later date by Pubcos increasing the royalties they charge and increasing their percentage share of the machine takings, it is the actual mechanism of the machine tie that needs to be removed.

  The Pubcos only argument in defence of the AWP machine tie is that they add value to the AWP machine takings (the value they add bears no relation to the amount of money they take out) but even the Pubcos do not claim to "add value" to Pool Tables, Juke Boxes and SWPs (quizzes) but they will continue to charge royalties and take a share of the taking of these machines by way of the machine tie mechanism.

  The latest rent lists of Enterprise Inns and Punch Taverns and the rent list from "What Amusement Machines" the magazine for pub landlords which shows them what rents they should be paying for their AWP machines this information shows that for the latest AWP machines Punch Taverns tenants are paying £22.50 per week more for their machine than a free of tie tenant and Enterprise Inns tenants are paying £21.00 per week more than a free of tie tenant (the machine supplier then pays the extra rental payment to the Pubco in the form of a "royalty").

  I hope there is some way in which the Committee's recommendations can be imposed on the Pubcos because the only way the Pubcos will move on this issue is if the removal of the machine tie is made mandatory.

  I would like to repeat what the chairman of the T&ISC, Martin O'Neil was moved to say in 2004 "the issue of machine income is the last blatant example of the profiteering that had been common place among pub landlord companies historically". The machine tie was unfair, unjust and wrong when it was evolved by the brewers and it is still unfair unjust and wrong today.

17 November 2009

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