500,000+ Restaurants Revolt Against Zomato, Swiggy; Accuse Them Of Unfair Business Practice
It appears like the feud between the restaurant industry body National Restaurant Association of India (NRAI) and online food aggregators have not yet settled.
The restaurant body, with over 500,000 restaurants, have protested and showed its disconcertion towards the ‘anti-competitive’ practices performed by food aggregators like Zomato and Swiggy, for over a year.
On Monday, NRAI informed about filing a probe against the unfair practices conducted by food aggregators at the fair trade regulator Competition Commission of India (CCI).
NRAI Files Probe Against Swiggy, Zomato
This is not the first time the association is taking such a step. In 2019 too, many restaurants under the NRAI had decided to break their ties with food aggregators, under the #LogOut campaign, in response to deep discounting practices conducted by the latter, which hurt the revenues of restaurants.
The disparity and bitterness between the two sets only widened with the Covid-19 pandemic.
The main issues taken over by the restaurant body, as submitted to the CCI include:
- bundling of services,
- data masking
- exorbitant commission charged
- price parity agreements
- deep discounting, in addition to orcing restaurant partners to give discounts to maintain appropriate listing
- exclusivity of listed restaurants, and violation of platform neutrality
- vertical integration, and
- lack of transparency on the food ordering platforms, as stated by Business Standard.
No Common Ground In Sight
Speaking on the matter, NRAI’s President, Anurag Katriar says that they have been in constant dialogue with the food service aggregators for more than the last 15-18 months, to resolve critical issues impacting the sector.
Despite all the efforts, nothing appears to be resolved between the body and the food aggregators.
“We have, therefore, approached the CCI to look into the matter and investigate them thoroughly,” states Katrirar.
Katriar also added that in addition to the existing malpractices conducted by Swiggy and Zomato, the magnitude of these activities from their end increased manifold during the pandemic.
He adds, “Despite discussions, these deep-funded marketplace platforms were not interested in alleviating the concerns of restaurants. In fact, during the pandemic, due to the onerous terms imposed, a lot of our partners had to shut shop”.