Considering the high prices of food and water inside multiplexes, the Bombay High Court on Wednesday said that it should be sold at regular prices. Post which the Maharashtra government told the court that it would soon come with a policy on the issue, as per the media reports.



Recently, a Public Interest Litigation (PIL) was filed by Jainendra Baxi against the prohibition of outside food in the theatres. Division bench of justices S M Kemkar and M S Karnik was hearing the PIL.



There is no legal provision which prohibits outside food and water inside the theatres, petitioner’s lawyer, Aditya Pratap Singh, told the court. Whereas, theatres sell food and water inside at a higher prices.



The court opined that if outside food in multiplexes is prohibited then multiplexes cannot have their own vendors selling food inside at a higher prices. Government pleader Purnima Kantharia today told the court that after taking into the consideration the suggestions by Multiplex Owners’ Association (MOA) and the petitioner, state would soon frame a policy on the issue.



The policy is likely to be framed within six weeks, she told the court. The bench then posted the petition for further hearing on June 12, as per the media reports.



Multiplex companies like PVR Ltd and Inox Leisure Ltd used to enjoy higher margin owing to absence of any policy to regulate such higher prices. PVR and Inox’s ~26% and ~22% of 9MFY18 revenue respectively was generated from their food and beverages business, which is very significant. PVR Ltd has ~617 screens at 133 location spread across 51 cities, while Inox Leisure Ltd has ~488 screens across 60 cities.



We expect that formation of this policy will restrict these players to keep such higher prices. This will result in reduction in the margins of their food and beverages segment which will ultimately hinder the profitability of these companies.





PVR Ltd is currently trading at Rs1,259.10 down by Rs1.9 or 0.15% from its previous closing of Rs1,261 on the BSE. The stock is currently trading below its 200 DMA.



Inox Leisure Ltd is currently trading at Rs269.70 down by Rs0.6 or 0.22% from its previous closing of Rs270.30 on the BSE. The stock is currently trading below its 100 DMA.