CINEMA chain Cineworld could face a full competition investigation over its £47m takeover of art house firm Picturehouse.

The Office of Fair Trading (OFT) has referred the deal to the competition commission after revealing worries it could limit choice and increase prices.

The OFT says the takeover of the 22-strong Picturehouse chain, announced in December last year, could significantly reduce competition in Aberdeen, Brighton, Bury St Edmunds, Cambridge and Southampton, where both brands overlap.

Jackie Holland, OFT senior director, said: “Although Picturehouse cinemas show art house and foreign language films, a large proportion of their revenue comes from more mainstream films, in direct competition to Cineworld.

“We are concerned that cinema-goers could face higher ticket prices and a reduced choice.”

The competition commission is expected to deliver a full report in October.

The deal saw Cineworld, which has a multiplex in Middlesbrough, add 22 Picturehouse cinemas to its network of about 80 cinemas.