New York Airport F&B Concessionaires Have Ripped People Off Long Enough, Port Authority Now Applies New Rules

Going through a New York Airport has been ridiculous for the common traveler who doesn’t have access to airport lounges as buying even something small to eat and drink cost a fortune but the Port Authority of NY now had enough.

Following bad reviews and public outrage over the pricing that applies to food and beverage in the cities airport officials created new guidelines to curb the prices to be closer to the “street level” plus a small premium.

This latest public outcry came about when a passenger published a complaint about paying $27++ for a beer at LaGuardia airport and the matter went viral.

In an effort to tackle this problem once and for all, the Port Authority of New York and New Jersey has developed guidelines for concessionaires at their airports that will cap the prices for F&B offered at “Street prices + 10%” to permanently remove price gauging from the list of their ugly problems.

This is the catalog of the new rules for concessionaires:

Download (PDF, 1.73MB)

How exactly will this look like?

Each concession agreement shall provide that Concessionaires shall not charge prices to its customers in excess of “Street Prices”, defined as follows:

a) If the Concession conducts a similar business in off-airport location(s) in the Greater New York City-Northern New Jersey Metropolitan Area (the “Metro Area”), Street Prices shall mean the price regularly charged by the Concession Sublessee for the same or similar item in the Metro Area.

b) If the Concession does not conduct a similar business in off-airport location(s) in the Metro Area, Street Prices shall mean the average price regularly charged in the Metro Area by similar retailers for the same or similar item.

c) If neither the Concession nor other similar retailers sell a particular item in the Metro Area, Street Prices shall mean the price regularly charged by the Concession or similar retailers for the same or similar item in any other geographic area, with a reasonable adjustment for any cost-of-living variance between such area and the Metro Area.

That’s a very reasonable approach much to the displeasure of the concession holders who have been ripping off passengers for years. New York airports are exemplary why it pays off to have a membership for the respective airline clubs or the Amex Centurion Lounge. That will save a ton of money over the year and while I don’t think you have to eat every time you’re at the airport most passengers at least need something to drink. Bottled water or juice was highly overpriced too, not just beer!

This is the official press release by the Port Authority:

The Port Authority of New York and New Jersey today announced a series of measures being promulgated by the Aviation Department to significantly enhance the clarity of and compliance with fair market pricing policy for goods sold at airport concessionaries. The policy caps all concession prices at local, off-airport “street prices” plus a maximum surcharge of 10 percent and requires concessionaries to offer lower-priced food and beverage options to provide a wider range of value for customers.

The new measures, detailed in a revised “Concessionaire Street Pricing Standards & Procedures Manual” published on the Aviation Department’s website, were informed by the findings of a review undertaken by the independent Office of Inspector General prompted by reports of past violations of the policy at some concessionaires.  The OIG’s review arrived at two main findings that the new measures directly address:

1. The OIG substantiated that certain violations of the street pricing policy occurred, including the prices of certain beers sold at LaGuardia Airport’s Terminal C and managed by concessionaire operator OTG. The review was initially prompted in July 2021 by a traveler’s complaint on social media about the listed price of a seasonal beer, which exceeded $27. In reviewing the records and assessing all charges associated with the vendor, the OIG determined that certain beer prices included an erroneously added surcharge on top of an inflated base price. Based on a detailed review of the concessionaire’s records, the OIG determined that a total of 25 customers were charged the totally indefensible amounts of $23 or $27 (depending on size) for a beer. The OIG further confirmed that, as a corrective action, the concessionaire had contacted all 25 customers and refunded the entire check of their order.
2. In assessing a range of other products and concessionaires, the OIG further determined certain aspects of the previous iteration of the street pricing policy were too vague and lacked adequate specificity to enable concessionaries to know with precision what they were expected to do to comply with the policy.  The OIG concluded that the street pricing policy required revisions with greater clarity and granularity to be fully enforceable. The new measures announced by the Aviation Department and memorialized in the revised manual now provide this level of requisite specificity.

“All airport customers should rightly expect that policies which limit the pricing of food and beverages at concessions will be followed and enforced,” said Port Authority Chairman Kevin O’Toole. “Nobody should have to fork over such an exorbitant amount for a beer.  The Aviation Department’s new compliance and enforcement measures announced today make it crystal clear that all prices at concessions will be routinely monitored to ensure they are aligned with the regional marketplace. And all airport customers and concessionaires should expect tough pro-active enforcement going forward now that these revised standards are in place.” …

Not only will there be a price curb going forward but the concessionaire OTG also had to contact all customers who were charged such an enormous price for a single beer and refund their entire check. Not sure why there is so much focus on this beer and not the other rip-off pricing they have at their outlets.

OTG operates in a lot of locations throughout the U.S. :

• Chicago
• Houston
• Minneapolis
• New York JFK
• New York LaGuardia
• Newark
• Orlando
• Philadelphia
• Washington Reagan National Airport

Maybe someone out there should inspect what this vendor is pulling at all these other locations as well just to make sure the same practices aren’t going on elsewhere while NY is cracking down on them.

But it’s not just this one company. The pricing for food at airports has gone insane and it’s not just U.S. airports, this is a matter that affects travelers worldwide.

Conclusion

The Port Authority of New York and New Jersey just announced new price caps for food and drink services in all three NYNJ airports to prevent concessionaires from price gauging travelers. The new rule limits concession f&b prices to the product’s “street pricing” outside the airport plus a max 10% add-on to pay for concession costs which are typically higher than in the city.

The concessionaire OTG got caught with the whole hand in the honeypot and now has to refund passengers who were overcharged on said beers. The beers are only the surface of the problem but at least they lead to the right thing being done now, tackling the entire problem.