New Delhi: Moviegoers in Maharashtra are now free to take food into multiplexes, the state government said on Friday, likely bringing relief to audiences put off by the high food prices charged by cinemas.

The government said cinemas prohibiting people from bringing food from the outside would face strict action.

The announcement was made by minister of state for food and civil supplies Ravindra Chavan in response to a query raised by NCP MLC Dhananjay Munde. The decision comes in the wake of a public interest litigation filed in the Bombay high court against cinema chains restricting personal food and charging exorbitant rates for food sold inside.

If a court order follows, multiplexes elsewhere could also be hit. For most multiplex chains across the country, the overall growth in revenue comes from addition of screens, increases in food and beverage consumption as well as advertising. For example, PVR Ltd witnessed a 16% rise in revenue from F&B, from 362 crore in FY15-16 to 422 crore in nine months of FY16-17. The share of F&B in PVR’s overall revenue has gone up from 26.4% to 27.1% during the same period. The overall F&B spend per patron went up from 40 in FY11-12 to 82 in FY16-17.

INOX Leisure Ltd’s F&B income has gone up from 162.3 crore FY14 to 306 crore in FY18. The share of F&B to the overall revenue of INOX went up by 7.7% from FY17 to FY18.

“Almost 35-40% of revenue for multiplexes is generated by the food and beverage segment, hence it is a high margin business for the market," said Rahul Puri, managing director, Mukta Arts and Mukta A2 Cinemas.

“For a company like Mukta A2 Cinemas, 25-30% sales is contributed by the segment. As the final court verdict is yet to come, the government must engage with multiplexes before passing any statement on this issue."

Shares of PVR and INOX slumped as much as 12.9% and 14.1% respectively, after the government announcement.

PVR shares posted their biggest intraday percent fall since September 2016, hitting their lowest since 28 March. INOX shares fell to their lowest since September 2017, post biggest intraday percent drop since December 2014.

PVR and INOX had not responded to Mint’s queries at the time of going to press.

“There are a lot of factors that need to be looked at when making a decision like this," said film distributor and exhibitor Akshaye Rathi.

From people possibly carrying arms inside food containers to creating a mess with oily food to hurting religious or dietary sentiments of those sitting around them, Rathi said the possibilities were many, especially in large 1,000-seater single screens. Rathi hoped the final court order would consider these factors.

“The average length of a movie today, at best, is 2 hours 15 minutes. I can’t think of anyone who can’t have a meal before stepping into a theatre, waiting for the film to get over and then eating. Plus, while the needs of the citizen are important, governments also need to take cognizance of the fact that multiplexes need to maintain a certain standard of infrastructure, quality and security as business enterprises that are answerable to shareholders," Rathi said.

Abneesh Roy, senior vice-president at Edelweiss Securities, said multiplexes were likely to contest the decision if there is a similar final court order.

“They could take pro-active steps like increasing ticket prices to accommodate the loss in F&B revenue. It’s a private business so if revenues are controlled, they will ask for costs, including mall rentals to be controlled too," Roy said.

The multiplex association of India refused to comment on the matter beyond stating it had not received any formal notification in this regard from the government and the case was subjudice.

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