Movie Theaters Forced to Allow Outside Food

According to Ynet, the Knesset recently passed a bill requiring all public places that sell food to allow visitors to bring in their own food. Restaurants, of course, will be exempt.

The impetus for this bill was customer complaints regarding the high price of concessions, mainly popcorn, in movie theaters where patrons were banned from bringing in their own food. The Finance Committee railed against concessionaires exploiting captive audiences by charging exorbitant prices for food and drinks. The  new law won't just apply to movie theaters but to beaches, hospitals, and other public places that sell food. 

A June article at Sponser.co.il reported that the movie theater association's lawyer denied that moviegoers are a captive audience because they can eat and drink outside the theater or at home before or after they come to the theater. He compared the choice of buying a child popcorn at the movies to the choice of whether to buy him a first class ticket on a flight or to put him in coach. "It's all a matter of financial decision-making," he said. But the chair of the Finance Committee Carmel Shama-HaCohen replied that if they are comparing a child's request for popcorn and soda at the movies to his request to fly business class it shows how disconnected they are. The committee chair also was bothered by the idea that movie tickets are cheap because they are subsidized by the profits made on concession sales. But researchers at Stanford think that this is a good thing: lower tickets for all based on the consumption of some. (“The fact that the people who show up only for good or popular movies consume a lot less popcorn means that the total they pay is substantially less than that of people who will come to see anything. If you want to bring more consumers into the market, you need to keep ticket prices lower to attract them.” Theaters wisely make up the margin, he says, by transferring it to the person willing to buy the $5 popcorn bucket.)

Another article reported that movie concession stands make up to 80% of their revenue from popcorn and that popcorn sales alone account for 8% of the revenue of the company's operating the theaters. The markup on concessions may be hundreds or even a thousand percent of the wholesale cost, with popcorn costing moviegoers the equivalent of 160-200 NIS per kilo.

The Wall Street Journal Law Blog reported on the LA Times story of a Michigan man who recently filed a class action suit against AMC Theaters claiming that the high prices on concessions amounts to price gouging. But "Gary Victor, an Eastern Michigan University business law professor, told the Hollywood Reporter that he thinks the case is unlikely to succeed, since the Supreme Court has given businesses in well-regulated industries an exception from consumer protection liability."

There is an article explaining the Jewish Law view of price gouging here. In Jewish law, charging 1/6 more than the going rate is considered price gouging and the consumer is entitled to get that 1/6 back. More than that, he is entitled to rescind the sale. However,"if the differential is very large and obvious, we may assume that the buyer must have been aware and has therefore knowingly paid the price (BB 78a, Shulchan Aruch 220,8)." Thus, when a person goes to the movie theater and knowing the prices there are exorbitant, he still buys food, perhaps he is deemed to have waived his right to claim price fraud.