Maharashtra multiplexes told to allow outside food

The Maharashtra government has asked multiplexes not to stop movie-goers from bringing their own food and to sell items at MRP.

State Food Supplies Minister Ravindra Chavan said the government would take action against multiplexes that do not comply with the order as people cannot be prohibited from carrying outside food.

Govt cautioned

The food and beverage segment is a high margin business, accounting for 35-40 percent of revenues for a multiplex. “For a company like Mukta A2 Cinemas, 25-30 percent sales is contributed by the F&B sector.

The government must engage with multiplexes before passing any statement on this issue,” Rahul Puri, Managing Director of Mukta A2 Cinemas, told BusinessLine.

In order to diversify revenue sources, film exhibitors have been focussing on sources such as food and beverage sales, advertisement and convenience fee. The share of F&B has been going up consistently in the operating income of multiplexes.

“The share of non-film exhibition revenues has increased from 32 percent in FY11 to 40 percent in FY16 in the total operating income,” research firm ICRA said in a report last October.

Food is also sold at prices higher than MRP in cinema halls, a major complaint of movie-goers. Any move to cut these prices will directly hurt multiplex owners. Neither Multiplexes Association of India founder Deepak Asher nor PVR Cinemas offered comment.

Shares of PVR tumbled over 13 percent to close at ₹1,214.20 while Inox Leisure was down 5.43 percent at ₹238.70 on Friday.

The Maharashtra government’s move comes in the backdrop of a public interest litigation (PIL) in the Bombay High Court last year by Jainendra Baxi, who sought a directive to allow outside food into cinemas.

In April, a Division Bench of Justices SM Kemkar and MS Karnik noted: “The price of food and water bottles sold inside movie theatres are, indeed, exorbitant.

We have ourselves experienced it. You (multiplexes) should sell it at the regular price.”

The Maharashtra government was asked to frame a policy on the matter. The Minister’s comment is a step in that direction.

Source:-https://www.thehindubusinessline.com/news/maharashtra-multiplexes-told-to-allow-outside-food/article24427222.ece

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