National Restaurant Association of India (NRAI) has demanded that a code of conduct be put in place for online food aggregators like Zomato and Swiggy which have distorted the market with deep discounts and offers, reports Financial Express (FE).
“We are happy with the marketplace model. They are bringing restaurants closer to the consumer but they cannot get into exclusives, arm-twisting, promoting their own brands, using their own (search) algorithms. We all have happy hours, end of season sale but not that everything is perpetually on a sale. You are influencing the market forces. You cannot have the entire month saying no cook December,” NRA president Singh said. NRA represents 100000+ restaurants across the country.
Singh referred to the government’s recently updated policy that bars foreign direct investment (FDI) in e-commerce firms operating under the marketplace model and prohibits vendors from having an exclusive relationship with vendors. All the three major players in the online food ordering space - Zomato, Swiggy and Uber Eats - have received substantial investment from foreign venture capital (VC) companies.
“Given to press note-2 and it is the best time to have a code in place for the online food aggregators. If food aggregators start to flex their muscles because of the capital they have, then we need a code of conduct. If we can have a code between the aggregators and the association, we would be happy,” Singh added.
Ahmedabad Hotels Protest
On 11 January (2019) over 500 restaurants and hotels in Ahmedabad blacklisted Swiggy for its poor business practices. Subsequently, this boycott was extended to Zomato.
The hotels were protesting against the aggregators' demand to increase the list prices of items on their menu to accommodate the high commissions.
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