September 21, 2017    6 minute read

Serving Alcohol in Movie Theaters Increases Revenues, Not Underage Drinking

The Sound of Money    September 21, 2017    6 minute read

Serving Alcohol in Movie Theaters Increases Revenues, Not Underage Drinking

In Quentin Tarantino’s 1994 film Pulp Fiction, when gangster Vincent Vega (John Travolta) explains to his partner Jules Winnfield (Samuel L. Jackson) the “little differences” between Europe and the States, one example he gives is, “Well, you can walk into a movie theatre in Amsterdam and buy a beer.”

Things have changed. Increasingly that is possible in the US as well. Many movie theatres now offer alcohol – wine, beer and sometimes spirits – in an attempt to attract customers and boost revenues.

In the United Kingdom, Europe and Asia this has long been possible, too, at such theatres as Vue Cinemas, ODEON and CJ CGV.

Growth of a Trend

There were only 14 such theatres throughout the US in 1997, and 600 in at least 32 states by 2015. That is still nowhere near a majority of the nation’s 5800 theatres, but that is something like a 43-fold increase.

Exhibitors decline to reveal how much revenue they derive from alcohol sales, but marked-up concessions have long been where the multiplex makes its greatest profits. The cost of a glass of wine in the theatre can easily surpass the cost of a bottle outside.

Many theatres also are coming with special cocktails tied to one of their blockbuster films, such as Wonder Woman or Fifty Shades Darker.

This year the AMC chain reported that it serves alcoholic beverages in 245 of its theatres, calling it a “popular amenity” that contributes to a “better movie-going experience.” It also notes that it has done this responsibly in regards to preventing underage drinking despite many of the theatres being located in popular family destinations.

Another chain, Cinépolis USA, says it expects alcohol sales will account for 28% of its combined food and alcohol sales this year, as much as 5% over last year.

In Canada, some theatres not only sell alcohol at a bar but beer from vending machines.

Political, Parental Opposition

Yet, New York, the city that never sleeps, has consistently opposed such moves. Although state law allows movie theatres to sell alcohol if they have a table for each seat and also serve “restaurant-style food,” Gov. Andrew Cuomo tried to ease those restrictions. The legislature on both sides of the political aisle disagreed.

Many parents and anti-underage drinking organisations oppose lifting such laws. For decades parents have considered movie theatres a safe place to drop off the kids, often unsupervised. Now they have to worry that their sons and daughters who are not yet 21 will manage to get alcoholic beverages, either through lax enforcement, fake IDs or getting someone else to buy them a drink. In a darkened theatre, they argue, no one can see if someone is drinking illegally.

But there is no evidence that alcohol in movie theatres is increasing underage drinking or deaths from alcohol-related causes. In fact, underage drinking in the US is declining across the board. So are underage deaths from alcohol-related causes, about 5000 per year in 2013, down to 4300 in 2016, according to the Center for Disease Control and Prevention. That is still too high, but alcohol in movie theatres does not seem to be increasing it.

There is evidence that more and better resources are needed for alcoholism prevention and treatment, from bare-bones AA meetings in a church basement to luxury rehab centres. But there is not even anecdotal evidence that links increased drinking to movie theatres where alcohol is served.

Movie Theatres Need New Revenue

There is much evidence, however, that it increases movie theatre profits, and theatre owners are desperate for the revenue. The weak economy and new, improved and larger televisions and movie streaming services – sometimes simultaneous with theatrical release – have hurt movie theatre attendance.

The owners have fought back with better seats – larger, more comfortable and farther apart, some even reclining – a more extensive concession stand menu and simulcast live shows and concerts. Those measures have helped, but theatres with bars report as much as 40% of their revenues coming from alcohol sales. That is a lot of cash to leave on the table.

In a guest editorial last year in the Buffalo News, Aurora Theatre owner Lynn Kinsella wrote:

“All movie theatres, especially those independently and locally owned, need to find ways to meet rising costs and remain competitive.”

She points out that alcohol is for sale at sporting events, bowling alleys, Broadway-style theatres and pointedly family-friendly venues such as Chuck E. Cheese. It is a matter of jobs and fairness, Kinsella wrote.

While it could be argued that children are not likely to patronise a theatrical stage show unaccompanied, and the other examples are all well-lit, the counter-argument is that many, maybe most, movie theatres take measures to prevent such abuse. Most only allow alcohol in the auditorium if the feature is not likely to attract an underage audience, and only allow a maximum of two drinks per adult patron per day. That is not a lot to drink over the course of a two-to-three hour film.

Many movie theatres do not even allow alcohol in the auditorium itself, but only in a special and scrupulously supervised lounge or bar area, for a pre- or post-movie drink. And some have switched to a 21-and-over policy that prohibits underage patrons in the theatre entirely unless accompanied by a parent or guardian.

Let the Market Decide

It is not an unregulated free-for-all either. Movie theatres, even if they apply for a liquor licence, need to go through the same vetting process and evaluation of how many establishments in the area already serve alcohol as any bar or restaurant. It is not a rubber stamp, and many local boards seem reluctant to approve them.

Even where it is legal, not all theatres want to serve alcohol. It is not like adding an item to the concession stand, but more like running two businesses instead of one, with new headaches and liabilities.

The way to stop alcohol in movie theatres is to not frequent cinemas that serve alcohol. If it does not improve their bottom line, theatre owners will try something else. As things stand now with declining attendance, movie theatres may go the way of the record shop and the bookstore.

Alcohol abuse is real. Underage drinking is real. Drunk driving is real. But despite the rise in movie theatres serving beer, wine and cocktails, concerns about alcohol served in movie theatres remains hypothetical. It is in everyone’s interest, theatre owners and the general public to keep it that way.

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