Eden Cinemas, the largest cinema complex in Malta, is accusing film distributors KRS of acting like a “cartel” after a dispute over a rise in charges which has seen cinema prices go up across the island.
KRS is responsible for managing the local rights of most major film studios and charges cinemas a percentage of box office takings for each film shown. The company also maintains control over release dates and the number of days films are screened.
Previously, KRS used fixed charges for all films, but the company changed its price structure late last year, increasing them for certain films, which prompted cinemas to raise their own prices to compensate.
KRS says the change was made to make the system fairer and to more closely reflect the rates being charged overseas.
However, Eden Leisure director Simon Decesare told The Sunday Times of Malta the changes were arbitrary and a form of retaliation for another dispute earlier in the year, when KRS insisted on its right to carry out inspections of box office takings.
Eden had claimed inspectors harassed and intimidated their staff, and that KRS threatened to stop supplying them with films when the issue was raised.
Mr Decesare said Eden had now filed a complaint with the Competition and Consumer Affairs Authority, accusing KRS of abusing its dominant position. “Since the dispute, they [KRS] have increased charges and put unfair limitations on matters like the complimentary tickets and bulk offers we can issue,” he said.
We do have a dominant position, but we’ve never been accused of behaving abusively in the past
Mr Decesare said that the level of control KRS maintained on other issues was also unfair, with release dates often delayed or low-performing films showing longer than was profitable.
“The whole idea of KRS is a colonial leftover,” he added. “In a normal world, we would be able to negotiate directly with different studios rather than having to accept whatever KRS dictates.”
When contacted, KRS director Alexander Pace insisted that the new charges were fair, pointing out that charges for certain film categories had remained the same or even decreased.
“We do have a dominant position, but we’ve never been accused of behaving abusively in the past and we’re now acting even more fairly than before,” he said.
“The overall increase is minimal, and if cinemas have raised prices across the board, they’re making more money overall.”
Mr Pace denied that the changes were a form of retaliation or that KRS had ever intimidated Eden staff during inspections. “We had every right to ensure we are receiving what is rightfully ours and that the figures being reported are correct,” he said.
He also defended the company’s level of control, adding that exhibitors were always free to accept or reject films they felt would be unprofitable.
Meanwhile, Embassy Cinemas in Valletta, one of two other major exhibitors, declined to comment on the dispute.
A spokeswoman said that while the cinema had been forced to raise its prices in response to the new charges, Embassy’s working relationship with KRS had not been affected.