Gov't won't overturn distribs' pricing pact

AMSTERDAM — The Norwegian government has let stand a price-fixing agreement between distributors and cinema owners in that territory until December of 1998, when the current contract expires.

The country’s competition authorities, acting on a complaint from several private cinema operators, had ordered the more-than-four-decades-old pact to end as of June 1 on grounds it broke Norway’s competition laws.

Private cinema gains

Municipalities own most of the cinemas in Norway, although private cinema building is beginning to gain a foothold. Both distributors and municipal cinema owners claim cinema in small towns and scarcely populated areas cannot withstand price bidding wars, an argument with which Norwegian minister of planning and coordination Bendik Rugaas obviously agreed.

Rugaas threw out the competition authorities’ ruling, saying, the “cultural aspect of the agreement ensuring that regional cinemas survive” qualifies it for an exemption to Norway’s competition laws.

Standardized rentals

The pact sets rental at one standard price that every cinema pays. Bjorn Hoenvoll, director of the Norwegian Distributors Union, told Daily Variety, “The agreement has worked to everyone’s satisfaction — until very recently, when private cinema began getting stronger. Private operators believe they can get better prices without it … and they might be right.”

A spokesperson for the ministry said both cinemas and distributors could renew the agreement at the end of 1998 if they could prove the cultural argument was still valid.

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