Investigation into cinema buyout

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AN INVESTIGATION has been launched into the deal which saw Redditch's cinema bought out by one of the country's leading cinema chains.

The Office of Fair Trading is looking into Vue Entertainment's purchase of the 14 Apollo Cinemas sites - including the one in the Kingfisher Centre - to examine the impact of the merger to see if competition in local areas may be affected and if there is a risk of price rises or a reduction in service.

A ticket to see Men In Black 3 in 3D at Vue in Worcester tomorrow (Saturday) at 3.40pm costs £11.85, while a ticket to see the same film on the same day but 20 minutes later at Apollo in Redditch will cost £6.20.

The Standard reported last week how the deal, estimated to be worth £20million, created a combined cinema circuit of 85 locations with 800 screens.

Although the buyout has been completed Vue has agreed not to rebrand or merge any of the Apollo sites into its business until the investigation is completed which could take two months.

The OFT has four options open to it. It can decide it does not have jurisdiction, it has no impact on competition or if it is found there is a substantial lessening of competition can refer the matter to the Competition Commission which will undertake a more in-depth review. Alternatively it can agree a deal with the company to sell off some of its assets in order to lessen the impact of the merger.

Film lovers and competitor cinema businesses are being asked for their views on how the merger may impact on them.

A spokesman for the OFT said: "In cases we are increasingly trying to seek views from people that may be affected. In any merger we are looking at whether there will be a substantial reduction in competition and whether it will lead to price rises or a reduction in the quality of service."

Residents have until July 10 to submit their views regarding the merger to OFT case officer Simon Deeble by emailing simon.deeble@oft.gsi.gov.uk or fax 020 7211 8916.

A spokesman for Vue declined to comment.

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