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NRAI files additional information with Competition Commission of India (CCI) vis-à-vis the Food Aggregators

Monday, July 12, 2021, 16:18 Hrs  [IST]
HBI Staff | Hyderabad

On July 1, 2021, the National Restaurant Association of India (NRAI) filed an information with the Hon’ble Competition Commission of India highlighting the inherently anti-competitive practices of Zomato & Swiggy.

 

NRAI highlighted the following practices by Zomato & Swiggy which had a debilitating effect on the restaurants and the entire ecosystem: (a) Bundling of services, data masking and exorbitant commission charged; (b) Price parity agreements; (c) Deep discounting: forcing the restaurant partners to give discounts to maintain appropriate listing; (d) Exclusivity of listed restaurants

 

While the promoters of Zomato have described the concerns expressed by NRAI as misplaced, we have received an enormous amount of support from partners / restaurants in the ecosystem all over the country who have come forward and given us more evidence to show how Zomato and Swiggy have used their market power, especially during the pandemic, to impose terms which the restaurants have no choice but to accept. These deep funded aggregators have adversely affected the business interest of our partners and in the process, hampered the entire F&B ecosystem.

 

Considering the same, NRAI has, on 12th July, filed an additional information with evidence with the CCI highlighting the following practices:

1.       Exorbitant commission: Zomato and Swiggy are charging a commission in the range of 25 to 35% of the order value in 2020-21.

 

2.       Delay in payment: There have been numerous instances of delay in payment by Zomato & Swiggy which has affected the entire cash flow of our partners.

 

3.       Forcing restaurants to give discounts: Zomato & Swiggy are forcing restaurant partners to give discounts on their platforms to maintain good visibility on the platform. They have shifted the entire cost burden on the restaurants.

 

A combined effect of (1) to (3) is that a lot of our partners are in extreme stressful conditions and are on the verge of closing. The restaurants are running at a loss since they cannot meet their expenses, yet they had to rely on Zomato and Swiggy due to the pandemic curbs and sentiments. 

 

4.       Price parity: These food aggregators are threatening to delist the restaurants if they do maintain price parity. There have been instances wherein some partners have been delisted from platform since they offered some better rates to consumers on other channels.   

NRAI believes that the evidence furnished before the Hon’ble CCI will further evidence the unfair business practices of Zomato & Swiggy and the authority will investigate the conduct of these aggregators.

 

Speaking on this, Anurag  Katriar, President of NRAI said, “Ever since the news of us filing information against food aggregators with the CCI came out in the public domain, we have received overwhelming support from our restaurant partners and the Industry in general. Many members have shared their personal experiences of misuse of power by these food aggregators. This prompted us to file some additional information with the CCI to ensure that our continued efforts to safeguard the interests of the F&B industry will bear fruit and this in turn will help in providing a level playing field for each player in the marketplace. We are committed to cause of our partners, and we will put our best efforts with the CCI to ensure that the practices of these marketplace platforms are aligned to the benefit of the entire F&B industry.”

 
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