What’s up with NRAI vs SWIGGY and ZOMATO?
The National Restaurant Association of India has made accusations against Swiggy and Zomato, the food delivery giants, approaching The Competition Commission of India.
The restaurant industry body NRAI has alleged that the food delivery companies are using “anti competitive practices”.
Alleging the food delivery companies Swiggy and Zomato of using “inherently anti-competitive practices” The NRAI has filed information with the CCI on July 1.
The restaurant advocacy group stated in a statement on July 5, that during the pandemic both the company’s “anti-competitive practices” have increased, even after numerous conversations between the restaurant advocacy group and the aggregators.
“We have been in constant dialogue with the food service aggregators over the last 15–18 months to resolve critical issues impacting the sector. However, despite all our efforts, we have unfortunately not been able to resolve them with the aggregators. The needle hasn’t moved much on these issues. We have therefore approached the CCI now to look into the matter and investigate them thoroughly,” Anurag Katriar, President of NRAI said.
The NRAI has approached the CCI to look into the matter and investigate the same. NRAI alleges that over a period of time, practices of Swiggy and Zomato have started affecting the Food and Beverages (F&B) Industry negatively.
Some of The main allegations made by the advocacy group are;
- Deep discounting — In a statement given by the advocacy group, NRAI has stated that the aggregators have forced the restaurants to give discounts in order to maintain the listing.
The restaurants would have taken action against the aggregators by not giving in by choosing not to participate and work independently, but it doesn’t seem that easy especially due to the ongoing Pandemic.
The pandemic has forced the restaurants to open and close numerous times now, hence, eliminating the option of earning profits and maintaining the business by only dine in services. Even without a lockdown in place, people have started relying on online food delivery apps instead of leaving their houses, especially after the “no contact policies” and several discounts being offered.
The NRAI has also argued that this might come off as ‘anti-consumer’ as for restaurants to offer good bargains, they might have to cut down on the quality of the food and services.
2. Bundling of services, exorbitant commission charged ,masking data, Thereby, creating monopoly.
3. The restaurants also alleged that the amount of commission paid by them affected their search rankings, hence violating platform neutrality, vertical integration and a lack of transparency.
No official statements have been made on the accusations by either Swiggy or Zomato, but Zomato’s Co- Founder Gaurav Gupta, speaking with CNBC TV-18 has said,
“The issues raised by NRAI are misplaced, and we will work with them to help them understand that and find solutions to problems they are facing. Our motto is that if the restaurant industry grows, Zomato will grow. We are still friends with the restaurant industry, and there are always some fights between friends.”
This statement has come after Zomato made the announcement of a Rs. 9375 crore IPO.
The CCI on the other hand, has also, made no official statement on the matter,
it might dismiss the complaint or order a probe to investigate the plea.
Meanwhile the NRAI has stated that it is also planning on launching an app, in an attempt to take on Swiggy and Zomato.
The ongoing clash between the food techs and the NRAI, might end up affecting the pockets of the end consumer.
“Consumers will have to bid good bye to happy hour menu deals if amendments on flash sales are allowed to be a part of new regulation. It’s time to move beyond lip-service and take all stakeholders onboard while designing protocols for digital commerce”, Sharat Chandra, an emerging tech Evangelist told The Quint.
