NYC Sugar Soda Ban Threatens Movie Theater Revenue
With a proposal to bar the sale of sugary sodas in more than 16 oz increments now officially law, movie house profits could suffer.
A move to help prevent obesity in New York City may end up thinning out exhibitors' wallets, as well.
On Thursday, the city's Board of Health approved a measure that bans the sale of sugary soda in bottles or cups larger than 16 oz. in many locations, including movie theaters. A cause championed by Mayor Michael Bloomberg, who had already successfully fought to ban trans fats and restaurant smoking in New York, the move was bitterly opposed by theater operators, which organized under the corporate-backed New Yorkers for Beverage Choice lobbying group.
It is a potentially big blow for exhibitors, as concessions offer a major profit margin. Theaters make up to 85 percent profit on snack sales -- they are regularly maligned for high costs -- and concessions make up to 40 percent of an operator's profit. Soda and candy are their two most popular items.
Theaters have already been hurting this summer, with the lowest box office returns since 2001.
"This is not the end," Eliot Hoff, a spokesman for New Yorkers for Beverage Choice, said in a statement. "We will continue to voice our opposition to this ban and fight for the right of New Yorkers to make their own choices. And we will stand with the business owners who will be hurt by these arbitrary limitations."
The ban does not extend to diet drinks, and of course, theaters can still sell up to 16 oz. of soda. In 2009, AMC banned any outside food or drink from its premises.
Still, the National Association of Theater Owners said this summer that most people only go to the movies four times a year, and buy concessions less often than that.