Multiplex chains have seen a steady increase in contribution from F&B in overall revenues over the years.
Multiplexes in Maharashtra will now have to allow outside food in theatres. This is after the Minister of State for Food and Civil Supplies, Ravindra Chavan Friday told the legislative assembly there is no ban on people carrying outside food to multiplexes. If multiplex authorities prohibit it they could face action, he added.
The exorbitant charges for food and drinks at multiplexes has been a contentious issue. After multiple complaints, the Bombay high court had earlier this year, said that food and beverage prices in theatres should be regulated.
However, what may come as a relief to moviegoers can put a lot of pressure on the theatre industry that gets a significant share of profits from this segment.
In a Moneycontrol report Rahul Puri, Mukta Arts, MD, had said F&B segment is very large and ranges between 25-30 percent of the industry and it is more important when it comes to profits. And this move will impact a significant share of the movie business.
Multiplex chains have seen a steady increase in contribution from F&B in overall revenues over the years, said a 2017 FICCI-KPMG report. To increase growth in this high margin revenue stream, these chains have expanded their F&B menu, introduced live kitchen counters, increased point of sales distribution all over cinema and used technology in the F&B process.
While multiplexes are striving to improve their F&B revenues, the Maharashtra government’s judgment may be a dampener.The share price of PVR, Mukta Arts and Inox Leisure fell 8-14 percent intraday on Friday following this news.