UKHospitality and the British Beer & Pub Association (BPPA) are to launch a legal challenge against plans for "devastating" increases to music tariffs.
The action follows an announcement by licensing company Phonographic Performance Limited (PPL) earlier this year, that it planned to introduce a new specially featured entertainment (SFE) tariff that would apply to hospitality businesses hosting events featuring DJs.
UKHospitality had said the tax would see venues hit by an average fee increase of 130%, costing the sector £49m. It is joining forces with the BPPA to mount the challenge.
UKHospitality 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."
She added: "UKHospitality 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 BBPA, 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."
Lord Smith of Hindhead, chairman of Best Bar None and chief executive of the Association of Conservative Clubs, has raised a question in the House of Lords about the increase. He said: "The increase is unjustifiable and will cause all operators real concern, particularly at a time when many struggle to pay basic overheads, such as their business rates."
He added: "PPL collected £250m in fees last year; raked off some £35m in administration fees and paid their CEO a package worth £786,000. If PPL want to provide copyright holders with a better return, then it should perhaps look at cutting their own expenditure. The proposed new SFE tariff fee is frankly outrageous and potentially damaging.
"The hospitality industry is the third-largest private sector employer and returns significant sums to the exchequer. This proposed increase is a slap in the face for hardworking business."
Lord Smith said the matter would be referred to the Copyright Tribunal for independent review.