Industry giants slam Zomato, Swiggy over private label food delivery
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New Delhi: The Federation of Hotel and Restaurant Associations of India (FHRAI) and the National Restaurant Association of India (NRAI) have voiced strong opposition to food delivery giants Zomato and Swiggy's foray into private label food delivery, citing concerns over unfair competition, misuse of restaurant data, and food safety risks.
The FHRAI, the third-largest hospitality association globally, highlighted that such practices disrupt fair market principles. It accused the platforms of leveraging restaurant data, including customer preferences and sales trends, to create and promote private food labels that directly compete with their restaurant partners.
“The actions of platforms like Zomato and Swiggy represent a direct violation of established e-commerce regulations,” said Pradeep Shetty, Vice President of FHRAI. “These companies were originally designed to act as neutral marketplaces connecting consumers with restaurants, not as competitors undermining the businesses they rely on.”
The NRAI, which represents over five lakh restaurants in an industry valued at ₹5.69 lakh crore, echoed similar concerns. “Zomato and Swiggy possess all our data but do not share it with us. For restaurants, there is complete consumer masking,” said Sagar Daryani, President of the NRAI.
Daryani added that private-label food delivery cannibalizes the business of restaurants dependent on these platforms, raising potential violations under the Copyright Act and other related laws.
The FHRAI plans to meet with officials from the Ministry of Commerce to demand regulatory measures ensuring fair practices. “We have requested an expedited appointment to discuss these serious issues,” said Shetty.
The associations also flagged food safety concerns surrounding private-label products, urging regulators to ensure compliance with standards.
In response to these allegations, Albinder Dhindsa, CEO of Blinkit, addressed concerns about Zomato’s practices. He quoted Deepinder Goyal, CEO of Zomato, stating, “Zomato will never launch private brands on the Zomato app to compete with its restaurant partners.”
Dhindsa clarified that the private-label initiative operates independently. “This is a standalone team with a standalone app. No Zomato restaurant data has been used, and the Zomato app will not market Bistro,” he posted on the social media platform X.
The hotel and restaurant industry continues to advocate for swift regulatory action to address concerns of data misuse, unfair competition, and food safety, as private-label food delivery emerges as a contentious issue in India’s food service market.
With IANS inputs