Maharashtra multiplex owners fear 35% revenue hit after govt's food order

The Maharashtra government's decision to allow moviegoers to carry their own food could spell gloom for the cinema and multiplex operators as they fear a loss of around 30% of their total revenue due to the decision.

Rahul Puri, MD, Mukta A2 Cinemas, said, "Almost 35-40% of the revenue is generated by the food and beverage segment for multiplexes overall, hence, it is a high margin business for the market. For a company like Mukta A2 Cinemas, 25-30% of sales are contributed by the F&B sector. As the final verdict is yet to be made by the court, our government must engage with multiplexes before passing any statement on this issue.”

F&B accounted for 26.71% and 22.70% of the total revenue for PVR and Inox, respectively. Shares of both the firms have nosedived ever since the announcement was made. Maharashtra accounts for more than 30% of the total revenue for the Hindi film industry. The state also has a very vibrant Marathi cinema.

The announcement has been made by Maharashtra Food Supply Minister Ravindra Chavan in the State Legislative Assembly and will come into effect from August 1. The minister also warned that action will be taken on anyone who stops people from taking food items inside cinema halls and multiplexes.

Deepak Asher, President, Multiplex Association of India, said, “Since the matter is currently under judicial consideration and as we have no other formal communication from any regulatory authority, we would not like to comment any further on the matter.”

The exhibitors are now fearing that other states could also now make the same announcement as it will be a popular move for the upcoming election season. "We would lose a lot if other states do the same. It would also lead to increase in the prices of tickets," a cinema chain owner said.

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