Restaurant-aggregator row: More join Logout campaign against discounts, Zomato Gold

The associations are of the opinion that the role of food aggregators is to merely aggregate services of the industry and not dictate commercial terms to and on behalf of the Industry.
Restaurant-aggregator row: More join Logout campaign against discounts, Zomato Gold
Restaurant-aggregator row: More join Logout campaign against discounts, Zomato Gold

Nearly two months after the National Restaurant Association of India (NRAI) took on food aggregators, especially Zomato with its #Logout campaign, it has now joined hands with the Federation of Hotel & Restaurant Associations of India (FHRAI), the apex bodies of the Hotel and Restaurant Industry in India, in this movement.

Having received support from FHRAI and various city-based associations, restaurants say that they now want to ‘take back control’ and send out a ‘strong message’ to food aggregators that they must always consult restaurants, not appease customers at the cost of restaurants, as well as ensure both restaurants and they benefit and not compete with them.

“The group recognises the need for a peaceful co-existence of the Hotel and Restaurant Industry with e-commerce aggregators, but is also very clear that the terms of engagement between the two sides have to be equal at all times, that no one can usurp the role of the other, and aggregators cannot dominate the Industry or conduct its business in a manner that is detrimental or negatively impacts the Industry’s growth or profits,” Gurbaxish Singh Kohli, President, Vice President, FHRAI said.

The associations are of the opinion that the role of food aggregators is to merely aggregate services of the industry and cannot decide or dictate commercial terms to and on behalf of the Industry.

The associations have identified 15 core complaints and grievances against Zomato and others aggregators. Apart from deep discounting and data masking, these include high commissions and high penalties, unreasonable charges, bringing of private labels, unreasonable rules of engagement, threats of dropping rating of restaurants, among others.

However, NRAI says that it has had various discussions with all five food aggregators in the market and issues with 4 out 5 of them have been settled amicably. The issue still remains with Zomato, which has been the bone of contention.  

“This group also unanimously agreed that Zomato Gold is an extremely detrimental product for the Industry and strongly opposes the same. It is clothed in such a manner that it misleads a few gullible members into disastrous consequences. The FSAs are slowly but surely gaining dominance with the help of massive funding being made available to them through venture funds and private equity capital, the funds are then used towards several unfair trade practices. As responsible industry bodies, we stand strongly to protect their interests,” Anurag Katriar, President, NRAI said.

These associations are now planning to hold city-level discussions with restaurants to bring more of them onboard the #Logout campaign.

Currently, NRAI claims that over 3000 restaurants have logged out of Gold and several large hotel chains are also preparing to leave. “We have spoken to large groups such as Taj, Marriott, which have hotels accepting Gold and they are also holding discussions with their regional managers now. We are also coming up with a campaign to educate customers to see what brands are on board and which aren’t and you will see that most of them are not on board. Its mostly the smaller restaurants,” Jimmy Shaw, executive committee member, HRAWI said.

Jimmy says that food aggregators are no one’s friends. “They never keep promises. This is being seen with even delivery boys fighting against them. They took our delivery boys promising them salaries that we couldn't afford and within months changed their rules and forced them to work longer hours,” he added.

NRAI will now be meeting with Swiggy and Zomato to discuss delivery as well. “We wanted to have a common contract for restaurants across the country. That’s one of the key things we have in mind. We also don’t want them to do data masking. They have shared their current contracts with us which our legal teams are examining,” Anurag added.

Responding to the statements made by the associations, a Zomato spokesperson said, "All of these are baseless allegations, and we would only classify them as false propaganda."

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