PremiumIndustry body the National Restaurant Association of India (NRAI) has submitted additional information with the Competition Commission of India (CCI) further highlighting exorbitant commissions charged by online food delivery firms and flagging delayed payments as well as laying the burden of discounts on restaurant partners.
The move follows the restaurant body announcing that it had moved the competition watchdog against online food aggregators with evidence to back allegations of anti-competitive practices such as data masking and charging of exorbitant commissions by food aggregators Zomato and Swiggy on 01 July.
On 12 July, NRAI filed additional information along with evidence with the CCI highlighting practices such as exorbitant commissions charged by Zomato and Swiggy in the range of 25 to 35% of the order value in 2020-21. It also raised concerns around delayed payments; apart from alleging that aggregators force restaurant partners to give discounts to maintain a prominent visibility of their listing. It also highlighted the practice of 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, it said.
This has shifted the entire cost burden on the restaurants and affected cash flows. 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, NRAI added.
“NRAI believes that the evidence furnished before the CCI will further evidence the unfair business practices of Zomato and Swiggy and the authority will investigate the conduct of these aggregators," it said in a statement.
Meanwhile, Zomato that is set for a stock market listing, recently told reporters that NRAI’s concerns against food aggregators were misplaced and that it is yet to receive an intimation from the Competition Commission of India.
The company is committed to working and resolving differences that emerge with the restaurant body and the restaurant industry at large, the company’s top executives said last week while announcing the online food platform’s IPO plans.
NRAI said it will work towards safeguarding interests of the food services industry.
“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," Anurag Katriar, President, NRAI said.
While the promoters of Zomato have described the concerns expressed by NRAI as misplaced, we have received an enormous amount of support from partners and restaurants in the ecosystem all over the country, NRAI said.
In its earlier communication to the CCI—NRAI had highlighted bundling of services, data masking and exorbitant commission charged, along with price parity agreements as some of the practices followed by food aggregators that it said are impacting the dynamics within the restaurant industry.
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