Extract from a blog written almost exactly a year ago: “…we at least have one delicious vision; the brewery machine controllers (sorry, retailers) will now be told what they can have and what they will pay for it, instead of the other way around. Oh, how the worm has turned.”
And it may be argued, it has all come to pass. We broke the news (the first to do so) this week that Sceptre Leisure has told retailers that they must, from December this year, pay 8.7 per cent more for their AWP machines (Category C in the UK).
It is a bold bid by Ken Turner and Sceptre to get operators’ rents up somewhere near where they should be. Twenty years ago, a new AWP cost £1,100 and rents ran at £50 a week. Today a new AWP costs £2,700 and rents are… yes, still at £50 or even less. Add to that all the increases in costs we have seen and the picture becomes positively silly.
Our blog of last year was trumpeting one benefit of a contracted market, with fewer manufacturers and fewer major players among the operators. It means that there are fewer of them to be bullied by the breweries and by their successors, the retailers. The “divide and conquer” tactic has less chance of working.
Just as getting down to a couple of serious AWP manufacturers has seen machine prices rocket by 40 per cent in two years by the simple use of collective clout, so the paring down of the operating business to three big players, Gamestec, Sceptre and the IOA, means that if they dig their heels in, then for the first time in my 47 years in the industry, the operators will be able to dictate terms.
Not that Ken Turner and co at Sceptre could ever be termed “bully”. They are infinitely more sophisticated than the brewery machine controllers of yesteryear and it seems will resist the temptation (it would be strong with me) to enjoy their dish of cold, sweet revenge. They are keen to insist that they see it all as a great opportunity for everyone, retailers, operators and manufacturers alike, to capitalise on the new £100 jackpot. I’m not sure that the retailers will see it that way.
In any case, the die is now cast for Sceptre. It has taken a bold step to get itself into a position where it can edge towards that magic one-third of the cashbox dream. It is now down to the other operators to follow suit, for everyone’s sake.
