On October 10, the Beijing Capital International Airport (BCIA) stock
company? announced that it would lower the price of 852 types
of catering commodities, accounting for 50 percent of the total.
The operation is proceeding smoothly.
The announcement was made by BCIA, in association with the
Beijing Airport Catering Service Company and individual merchants
in the airport. The price-adjustment action covers Chinese food,
Western cuisine and fast food.
Coffee comes in first with the biggest price cut of 40 percent.
According to Beijing Morning Post, the price of coffee at 14
coffee houses in BCIA has decreased. In one location, the price for
the highest quality mocha coffee has dropped from 45 yuan (about
US$5.6) to 27 yuan (about US$3.3). Common coffee is even
cheaper.
BCIA spokesman Zheng Fang explained that since international
chain brands came to BCIA, they have kept the price and the quality
of commodities in the airport the same as in city districts, so
there has been almost no question of gouging passengers.
BCIA will use the prices of international chain brands as a
reference point to adjust prices for non-chain stores' goods. For
similar products, BCIA will manipulate the price by controlling the
gross margin of commodities.
The reason for keeping independent operators' prices in line
with those of the international chains is because the pricing of
the latter is transparent and consistent, Zheng explained. Besides,
different commodities have different gross margins, and controlling
them helps stabilize commodity prices.
The Beijing Municipal Commission of Development and Reform (BMCDR) has made it clear
that prices in the airport will be decided by the business
operators themselves. As for the much higher prices of some
commodities, BMCDR generally consults with the airport to reconcile
the problems. For instance, BMCDR may advise the airport bring in
more operators and lower prices through increased competition.
A Beijing Morning Post reporter noticed that current
price marked on an airport vending machine for a 355 milliliter can
of Coca Cola is five yuan (about US$0.6), a 180 milliliter Nescafe
is eight yuan (about US$1) and a bowl of pickled mustard green
noodles is 16 yuan (about US$2). As the airport staff explained,
the prices of catering commodities have been lowered by three to
five yuan (about US$0.4-0.6), sometimes even tens of yuan.
The airport indicated that the price-lowering plan refers to
catering goods only; retail goods are not included. However, there
is room for retail price depreciation, and more moves will be
pushed in the future.
The price-lowering plan has been considered to have something to
do with a change in BCIA's strategy for attracting tenants.
According to the airport, at the end of the last year, some
merchants' leases had expired and the airport developed a new
strategy to attract tenants. Payment terms have fundamentally
changed from only receiving a fixed rent to receiving a benchmark
rent plus a percentage of the tenant's profits.
If a merchant's business performs poorly under the new system,
he need only pay the benchmark rent, said the airport. However, if
he operates well, not only he himself will profit, but the airport
will also benefit.
(China.org.cn by Zhou Jing, October 20, 2005)