New Delhi, Jan 13 (NationPress) The Federation of Hotel and Restaurant Associations of India (FHRAI) and the National Restaurant Association of India (NRAI) have voiced profound concerns regarding the recent initiatives by online food aggregators Zomato and Swiggy to venture into the private label food delivery domain.

The FHRAI, recognized as the third largest hospitality association globally, highlighted multiple issues, including unfair competition, misappropriation of restaurant data, and potential hazards to food safety.

The NRAI, which represents over five lakh restaurants in an industry valued at Rs 5.69 lakh crore, stated that the private-label food delivery undermines the fundamentals of fair competition and presents a serious threat to the survival of numerous restaurants nationwide.

The FHRAI intends to convene with officials from the Ministry of Commerce to address these issues and advocate for regulatory measures that promote fair practices within the food service sector.

“We are scheduled to meet with the Commerce Ministry soon and have requested an expedited appointment to discuss this critical matter. The actions of platforms like Zomato and Swiggy constitute a direct infringement of existing e-commerce regulations,” stated Pradeep Shetty, Vice President of FHRAI.

Shetty emphasized that these platforms were initially intended to serve as neutral marketplace facilitators, connecting consumers with restaurants, rather than acting as direct competitors.

By launching and promoting their own food products, they compromise the very nature of the marketplace model, resulting in an uneven competitive environment that adversely affects restaurants, according to the association.

The FHRAI further noted that by utilizing data from restaurants, such as consumer preferences and sales patterns, Zomato and Swiggy can devise customized offers that directly influence the restaurants' operations.

Sagar Daryani, President of the NRAI, remarked that Zomato and Swiggy “possess all our data, which they do not share with us. There is complete consumer masking for us.”

This approach not only “cannibalizes the business of restaurants relying on these platforms” but also raises significant legal issues under the Copyright Act and related legislation, according to the NRAI.

Additionally, the industry organizations have expressed concerns regarding the food safety standards applied to these private label offerings.

The hotel associations have called on regulators to take prompt action to mitigate the escalating issues surrounding data misuse, unfair competition, and food safety in light of these recent developments in the food delivery landscape.

In the meantime, Albinder Dhindsa, CEO of Blinkit, stated that as Deepinder Goyal (CEO of Zomato) has consistently asserted, “Zomato will never introduce private brands on the Zomato app to compete with its restaurant partners.”

“This statement remains valid. Therefore, this service is not being developed within Zomato (the organization managing the brand or the app). It is a separate team with an independent application - and no Zomato restaurant data has been utilized. We will not even leverage the Zomato app to promote Bistro,” he posted on the X social media platform.