Probe into Cineworld deal for rival firm

The Office of Fair Trading (OFT) has referred the acquisition to the Competition Commission after uncovering potential issues in five local areas that it fears could limit choice and increase prices for cinema-goers.

Cineworld’s takeover of the 22-strong Picturehouse chain, which was announced last December, could substantially reduce competition in Aberdeen, Brighton, Bury St Edmunds, Cambridge and Southampton, where both brands overlap, according to the OFT.

The watchdog said initial research, including surveys of 35,000 cinema-goers, showed a sufficient number of customers see their local Cineworld as an alternative to Picturehouse, and that Cineworld “may find it profitable to raise prices after the merger”.

Jackie Holland, OFT senior director and decision maker in the case, said: “Our investigation found that although Picturehouse cinemas show art house and foreign language films, a large proportion of Picturehouse’s revenue comes from more mainstream films, in direct competition to Cineworld.

‘We are concerned that as a result of the merger, cinema-goers in five local areas could face higher ticket prices and a significantly reduced choice of cinemas and films.”

The Competition Commission is expected to report back by October 14.