Pubco boss calls for investigation into Sky price hike

A high profile multiple operator has called on the Office of Fair Trading (OFT) to open a new investigation into the way Sky sets its prices for pubs.

The call comes hot on the heels of the continuing wave of controversy over Sky's new pricing system.

A number of pubs have or are threatening to pull Sky as a result of the changes, which one trade group estimates has resulted in an average increase of 21.5 per cent.

Clive Watson, chief executive of Capital Pub Company, is furious at Sky's actions.

Capital has Sky in 12 pubs, but will be reviewing this on "a case-by-case basis" after being lumped with a 23 per cent across the board price hike.

"They have the control of a monopolistic supplier," said Watson.

"They determine the price they set and their pricing structure is not subject to market forces. Why should they be able to increase in line with rateable values?

"I seriously believe they should be referred to the Office of Fair Trading."

The OFT has previously found Sky to be "dominant" in its market, but not in breach of any competition laws.

Sky argues its the pricing new system, which takes a pub's trading style into account along with its rateable value - is fairer and "better reflects the value of Sky to individual premises".

A Sky spokeswoman said: "Pubs have a range of entertainment options available to support business, of which live sport is just one. Even though Sky competes with these options, the fact is that many thousands of pubs choose to subscribe to Sky because it's good for business.

"Sky is investing more than ever in putting more live sport on screen, as well as innovating through high definition and 3DTV. This investment results in increased sales for Sky pubs, as the evidence clearly demonstrates.

"We believe we charge a fair price for a high-quality product, and one which offers good value relative to the other choices pubs can make."