Guy Hands is calling into question the necessity of trade bodies the IFPI, RIAA and BPI, Billboard.biz understands.

Hands, chairman of EMI Group and CEO of Terra Firma, the equity firm which now owns EMI, is understood to have sent a damning letter to other labels in which he implies that there is no space in the industry for all three.

"These three bodies cost the industry $250 million a year. I've never come across an industry which spends so much on its trade associations," a source close to Hands tells Billboard.biz. "They've looked at it and suggested that that kind of expenditure, and having three bodies, might be rather more efficiently spent."

The source says the letter "essentially" suggests a massive overhaul of the IFPI. IFPI chairman/CEO John Kennedy says the association has seen "no such proposal."

He adds, "There's no surprises in any of this for me, no surprises that it's led by EMI. It's completely understandable and it's a sensible business process to go through. It's been a very tough year for the music industry and so of course, [labels'] budget discussions are looking at efficiencies and savings."

However, "I haven't seen any letter from Guy Hands," says Kennedy. "At different times, they have given me figures by way of guidance and I have responded to those figures with [suggestions of] how we could get to the stage where they were happy."

An IFPI spokesman adds, "We are engaged in annual budget discussions and, as one would expect in this market, there is a focus on efficiencies and savings. Meanwhile we have a very full agenda promoting the rights of our member record companies."

The IFPI estimates the record companies annual spend on IFPI, RIAA and all its other national groups combined is at roughly $130 million.

Hands' letter opens up a proverbial can of worms, made even more complex by the fact that Tony Wadsworth, the chairman/CEO of EMI Music's U.K. and Ireland company, also sits as chairman of the BPI.

It's not the first time Hands' has stirred-up the industry, or indeed his own company. Earlier this month, Hands told investors he would drop artists the music group believed were not working hard enough, and warned his executives of big changes to their pay structures.

EMI declined to comment.

Questions? Comments? Let us know: @billboardbiz

Print