Movie theatres and multiplexes generally charge more for the concessions than sometimes adjacent businesses in the same area, and also usually forbid patrons from bringing in their own food to consume on the premises. A recent case before the Bombay High Court argued that this was unfair to moviegoers and the court agreed:
Bombay High Court in Mumbai
© A.Savin, Wikimedia Commons
This is an interesting little test of the judicial system – you know, those told that the Beatles were a popular beat combo – on the subject of property rights. The Bombay High Court has just failed this test too. The question is, multiplex cinemas, why is the food so expensive in them? The correct answer is because the owners of multiplex cinemas make a profit in that manner. According to the court this doesn’t wash. In fact, they seem not to have even considered the argument in that manner:
The Bombay High Court has ruled that food items and bottled water be sold at regular prices inside multiplexes. The directive was issued by a division bench of Justices S.M. Kemkar and M.S. Karnik last week in response to a Public Interest Litigation (PIL) filed by Mumbai resident Jainendra Baxi. He had challenged the prohibition on carrying outside food in movie theatres and multiplexes across Maharashtra.
The economics here is simple enough. The people who order food inside the cinema, at those higher prices, subsidise the others who only buy the ticket to see the movie. Sure, that’s not the first round outcome, but it is the competitive equilibrium. Cinema owners being able to profit from food makes the basic ticket cheaper.
The rights based part is also simple enough. I’m running a business, I can and should be able to decide how people access that business. If I’m running a restaurant I’m entirely at liberty to insist that you only get to consume things at my table that you’ve bought from me. Even if I show a film at the same time.
Another way to put this is that the judges have just failed Chesterton’s Fence. They’ve not grasped why the limitation is in place to start with, therefore they see nothing wrong in ridding everyone of the limitation. And the net effect of this is going to be higher multiplex cinema ticket prices for everyone in Maharashtra.
