A Brewing Battle: Poor Management Leads to Millions in Losses

WASHINGTON — Poor management controls of Amtrak’s food and beverage service lead to millions in losses annually, reports reveal.

The Amtrak Inspector General (IG) and the Government Accountability Office (GAO), at a recent Congressional hearing, outlined their separate reviews of Amtrak’s food and beverage service and the substantial losses incurred by Amtrak due to poor management.

According to the IG’s review, Amtrak’s food and beverage operations lose up to $150 million each year. The IG figures do not incorporate losses resulting from theft, which were discussed in the hearing as being significant. The GAO review found that for every dollar Amtrak brings in for food and beverage revenue, it spends about two dollars.

“For the passenger, some form of food service is both a practical necessity and often a key social and leisure component of the rail experience,” said U.S. Rep. Steve LaTourette, R-Ohio, Chairman of the Railroads Subcommittee. “For the railroad, food service is an essential and challenging process that contributes little, other than goodwill, to the bottom line.

“While food operations have never contributed positively to Amtrak revenue, Amtrak has experimented over the years with different methods of managing its food operations trying to improve both quality of food service while at the same time trying to reduce costs. No easy task for any restaurant operation, especially one on wheels.

“Amtrak’s management acknowledges that even though they have made progress on correcting the previous mistakes associated with the current contract, they still have a ways to go, and are pursuing other avenues in an effort to control and reduce costs, while continuing to increase ridership and sales margins,” LaTourette said.

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