Allied pubs pull the plug on Sky-high TV costs

Allied Domecq is axeing Sky from 200 of its branded pubs in protest at the high price being charged for the service. The move is the latest in a line of similar withdrawals by big brewers, who represent one of BSkyB's largest sources of viewers for its sports channels.

Martin Grialey, marketing director of Allied Domecq Leisure, whose pubs include Big Steak pubs, Wacky Warehouses and the Firkin chain, said the cost to landlords of providing Sky had increased substantially in recent years to the extent that it was no longer viable in many of its pubs.

Allied Domecq Retail and its sister chain of community pubs, Allied Domecq Inns, together run 2,500 pubs of which about 1,000 currently offer Sky. Mr Grialey said he expected one-fifth of the branded pubs to withdraw the service following big recent hikes in the monthly subscription charged to publicans. The community pubs, which tend to have a younger, male customer base, are thought unlikely to follow the family pubs and will swallow the higher prices.

Commercial subscribers pay a much bigger monthly fee than domestic users to access BSkyB's package of channels, with bands based on the rateable value of their premises rising up to well over pounds 100 a month compared to a typical household package costing pounds 17.99. Domestic subscribers are contractually banned from showing programmes for profit.

Allied's decision to take on Sky follows similar moves by Bass, Greene King, Scottish & Newcastle and others. A spokesman for Bass said yesterday: "We are certainly not happy with the prices being charged by Sky. The customer base has to justify the cost and if that deteriorates we will pull the service."

A year ago furious publicans reported Sky to the Office of Fair Trading over what they claimed were huge subscription increases. Some said they had been asked to pay more than 10 times as much as three years ago when the service was in its infancy and desperate to attract viewers.

Now it has become a success, landlords claim, Sky is putting a squeeze on landlords, who accuse the company of adopting "bullyboy" tactics to extract payment. Some have accused BSkyB salesmen of posing as customers to phone pubs to ask if certain football or boxing matches will be shown on Sky. If licensees say yes, the callers identify themselves and threaten to cut off the pubs unless the fees are paid.

In other cases, it is alleged, BSkyB ``spies'' have been sent to pubs which have applied for Sky giving just their street number and address in order to pay only the normal household rate.

Other scams perpetrated by pub owners in order to get round the higher price charged to commercial users have included pubs buying special dishes that allowed them to pick up Premier League matches as they were beamed live on Saturdays to viewers in Norway. Once British licensees had fixed a pounds 400 dish they were able to tune into the matches free.

BSkyB maintains that its new pricing structure linked to rateable values represents a fairer system than the previous flat rate.