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VOL.6 April 2014
Reconsidering Restaurant Bans

Recently, a statement by the Beijing Administration for Industry and Commerce stopping restaurants and catering services from banning outside beverages has provoked heated debate among the public.

The administrationís announcement immediately met fierce contention. Three days after it was made public, the China Cuisine Association demanded the administration apologize for the regulation, arguing that under a market economy, consumers have the right to purchase what they like, and enterprises have the right to have their own values, under which they provide their products and services.   

The story didn't end with the denouncement from the association. On December 14, 2013,China ís Supreme People ís Court adjudicated on the matter, ruling that restaurants and other food service businesses may not be allowed to ban outside beverages.    

This incident sparked further debate among the public about whether restaurants should be allowed to ban outside beverages. Supporters of restaurant autonomy believe enterprises should have the right to conduct business as they choose. Opponents believe that it is unfair for restaurants to impose a ban on outside drinks because restaurants bear no additional cost.

Pro 

Wang Lei

163.com

It is legitimate and reasonable for restaurants to ban outside beverages with explicit notification. Charges in a restaurant cover not only food, but also facilities, environment and service there, which increase the value of the beverage. In terms of cost, it is understandable to forbid outside beverages and charge corkage fees as consumers pay for a kind of comprehensive service in a restaurant. To restaurant owners, allowing outside beverages means loss of revenue from beverage sales, which has a gross profit that is much higher than the food. To compensate for the slim profit margin from food, it is also fine to charge more for the beverages. Business operators have autonomy to decide their own way of doing business. They are not obligated to open beverages for consumers free of charge. As long as the beverage sells at an expressly marked price, the restaurant does not violate the nation's price law. The clause of "no outside beverages allowed" does not deprive consumers of rights to fair deal. Dishes and beverages are two different consumption categories. Of course, consumers have the right to choose not to buy the beverage there. But this does not mean they can bring their own. As long as the restaurants provide prior notice, they have guaranteed consumers' rights to know. It is on the consumers to decide whether to choose this restaurant or not.

 

Pro 

Fu Weigang

Researcher on finance and law 

Let us imagine what will happen to the food service industry if outside beverages are allowed. Surely, more and more people will bring there own beverages to restaurants. The extreme scenario will be that some customers only order a dish of peanuts and cucumber in garlic sauce, but drink alcohol they bring themselves. It seems unbelievable, but actually happened once. In 2011, many middle-aged people gathered in one of IKEA's branches in Shanghai for a matchmaking event. The reason why they chose the location was because IKEA offered customers with store memberships free coffee from Monday to Friday. It will also happen to restaurants if outside beverages are allowed. With a comfortable dining environment, a restaurant will attract more and more people who bring their own beverage but only order one dish and occupy a seat for a long time. Since the restaurants cannot send them away, raising the price of dishes is an inevitable choice. Increasing prices will result in more outside beverages and more outside beverages will lead to another round of increases in dish price. The ultimate loser in this downward spiral is consumers. Besides, restaurants provide cups for outside beverage, which means it takes the restaurants effort to wash them. As customers consume such service, they have to pay.

Con 

Zhang Ke

Chutian Metropolis Daily

Why does the stipulation of "no outside beverages allowed" provoke such heated controversy? Actually, besides beverages made in the restaurant, other beverages carry no additional labor cost, yet restuarants charge consumers prices that are much higher than fair market competition. If it were not for the high price, no customer would take the effort to bring their own. Therefore, efforts should be made to smash their monopoly on pricing the beverages they serve. Through free competition, the price of beverages in restaurants will be reduced. Customers have options to choose restaurants with reasonable beverage prices and dishes catering to their appetite.

Pro

Hu Shizhi

Economist

I don't think the restaurants' rule of "no outside beverages allowed" is unreasonable. In regard to beverages, the restaurant provides consumers with options: to buy or not. Marketers are not robbers. The so-called strong position of marketers comes from their capability of producing value. However, robbers force you to choose between money and death. Their strong position comes from threatening to destroy the value. If these two concepts are confused and restaurants are cracked down on by the government because of this, it is actually an overbearing behavior. Forcing others to serve is not one's right. If you believe others are obliged to serve you unconditionally, you are actually infringing on others' rights. I want to bring not only my own beverage, but my own food. Is that ok? If the restaurant disagrees, does it infringe upon my interests? I also don't want the restaurant to charge me. Is that ok? If the restaurant disagrees, does it infringe upon my interests? This is typically the robber's logic. If the law is made to safeguard such "interests," it is actually deviating from fairness. A restaurant has the right to refuse to serve any customer. In fact, getting into a restaurant relies on the owner's consent. Although the consent is implied on most occasions, people cannot take it as the restaurant's obligation and regard that they have the right to enjoy service without limitation.

Con

Shi Junying

Blog.jxcn.cn

In my opinion, Hu's arguments are questionable. First, the reasons he gave to explain why the ban on outside beverages is not unreasonable are not well-founded. China's Law on the Protection of Consumers' Rights and Interests endows every customer to freely choose the commodity or service they like. Merchants are not allowed to make stipulations unfavorable to customers. Even if they make them, the stipulation is invalid. Besides, the socalled "options" are actually no options at all. As we all know, as long as we enter a restaurant and accept their service, we do not have control in most occassions. Although the restaurant dares not to force us, they would treat us unfriendly and detachedly once we don't buy their beverages. As ordinary consumers, we would pay for a beverage no matter where we buy it. Why don't we like to choose ones in restaurants? The reason is that beverages there are too expensive. His second argument that "forcing others to serve is not one's right" is not appropriate. When going to a restaurant, consumers do not aim at forcing merchants to serve, but rather expect them to provide a fair deal. Between choosing extremely expensive beverages and bringing outside ones, does only accepting the former because of no other choices embody fairness? The theory that "a restaurant has the right to refuse to serve any customer" actually embodies robber's logic. What is a restaurant for? As a service and commodity provider in a market economy, restaurants shouldn't refuse any customer as long as the customer has real intentions to enjoy the service. If consumers are refused because of bringing outside beverages, the restaurant is discriminating against consumers. Imagine if you are refused by a cab or bus driver, you must immediately fly into a rage.

 

 

 

 

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