An investigation into high-flying prices on food and beverage concessions at the region’s three major airports is set for takeoff.
Port Authority of New York & New Jersey officials said Thursday that the bi-state agency’s new inspector general will examine whether OTG — the company that runs concessions at Kennedy, LaGuardia and Newark Liberty — or any other airport concessionaires are violating guidelines that only allow them to charge up to 10% more than “street pricing.”
The inspector general’s investigation comes after THE CITY reported this week that the Port Authority requested OTG do an internal audit after being called out online for a $27.85 beer that the company said was incorrectly priced.
“What you can buy in the street, you shouldn’t be able to pay more than 10% of that in an airport,” Kevin O’Toole, the Port Authority’s chairperson, said Thursday at a board meeting. “They shouldn’t take advantage of you because you are captive in an airport.”
The agency last year adopted a “street pricing plus 10%” policy on existing and future concessions agreements at airport gateways, saying the percentage was tied to minimum-wage increases in 2018 for thousands of airport workers.
As part of the policy, airport vendors are required to offer value-priced items — such as combo meals — to give customers additional options.
But after traveler’s tweets about a 23-ounce Sam Adams Summer Ale that was listed at $27.85 at a LaGuardia restaurant and a $10.90 order of French fries at Newark Liberty, OTG blamed “posted-pricing hiccups.”
“This is a situation where someone simply input the wrong prices,” said Michael Marchese, a spokesperson for OTG. “Once we learned of it, we immediately took action to correct and began proactively auditing our entire system to ensure there were no other mistakes.”
The company, whose website touts its “next-level technology” and “farm-to-terminal dining,” operates concessions at 10 airports in the United States and Canada. One of its senior executives is Larry Schwartz, a longtime lieutenant of Gov. Andrew Cuomo and an MTA board member.
‘It’s a Corruption Story’
Cooper Lund, an IT systems administrator who lives in Brooklyn, flagged the pricey suds in a July 7 tweet that also showed a New Belgium Fat Tire Draught listed at $20.60 and a Weihenstephaner Hefeweissbier at $18.15.
“This isn’t a travel story, it’s a corruption story,” Lund told THE CITY on Thursday. “It’s a great example of how all the low-level corruption that we put up with in New York City affects people.”
OTG said the Sam Adams Summer Ale should have been listed at $18.15 (you can get a 12-pack for less on Instacart) and that the fries at the Novella restaurant in Newark Liberty should have been $8.45.
Prices for airport concessionaires are set after retailers are required to provide four product comparisons to businesses in the New York City region.
“I got a bagel with some small potatoes for 15 bucks,” said Felipe Perez, who flew into JFK last week from San Francisco. “I shouldn’t have paid more than $10 for that.”
But OTG outlets aren’t the only ones whose prices appear to test the limits on the 2020 pricing guidelines, THE CITY found. At a Hudson News shop at JFK’s Terminal 1, a 20 oz. bottle of Dasani water went for $3.69 — in contrast to the $1.75 price for that same item at a deli across from Jamaica Station.
A Port Authority spokesperson said that terminal operators contracted by the agency are required to ensure that concessionaires, baggage handling and custodial companies stay within rules and regulations.
O’Toole said OTG and other airport businesses “have a pretty good track record of providing quality services” and chalked up the reports of overpriced products as “anecdotal.”
“If there are abuses out there, we should have to hear that sooner than later,” he said. “I look forward to seeing those reports from the inspector general.”