The Cinema Exhibitors’ Association has reacted to this week’s Government announcement that from 1 December the rate of Value Added Tax will be reduced from 17.5 to 15 per cent.

Commenting on the move, CEA Chief Executive Phil Clapp said:

‘While we recognise the intention behind the proposed cut in VAT, the operational challenges presented by making such a small change will result in disproportionate costs for all cinema operators.

While all are keen to find some way of passing on to customers the savings made through the reduction, it needs to be done in a way that makes business sense for each company.

The approach taken may therefore vary from operator to operator, with some implementing reductions on all tickets and concessions and others offering targeted reductions on concessionary schemes such as family tickets. Others will commit to freezing ticket prices into 2009.’