NRAI Opposes Zomato, Swiggy's Private-label Foray, Cites Unfair Practices

The National Restaurant Association of India (NRAI), representing the interests of the Indian restaurant industry has strongly opposed food delivery giants Zomato and Swiggy's recent entry into quick commerce through private-label food delivery. According to the NRAI, the move undermines fair competition and jeopardises the livelihood of thousands of restaurants across the country.

Initially operating as marketplace platforms, Zomato and Swiggy are now using their dominant positions and access to restaurant data to expand into private-label food delivery, either directly or through subsidiaries. The shift not only cannibalises the business of restaurants dependent on these platforms but also raises concerns under the Copyright Act and other related legal frameworks.

Zomato and Swiggy, as marketplace platforms, were established to provide equal opportunities for all restaurant partners. However, their move into private-label food delivery, offered through their platforms and quick commerce ventures like Blinkit Bistro and Swiggy Café/ Snacc undermines this neutrality. By leveraging data sourced from restaurant partners, they create a conflict of interest, disrupting the level playing field. This practice risks destabilising the very ecosystem they were designed to support.

The NRAI views the introduction of private labels by Zomato and Swiggy as a clear misuse of their dominant positions, infringing upon intellectual property rights under the Copyright Act. To protect the interests of the restaurant industry, the association is committed to pursuing all legal avenues, including filing complaints with regulatory authorities and initiating legal action to prevent these platforms from monopolising the market.

Addressing the issue, Sagar Daryani, President of the NRAI said, "Quick commerce in food is here to stay, grow and add more zing to the food delivery space. People want more convenience and so it will add an edge to the restaurants that can adapt to it. We are completely for it. What we are absolutely not okay with is Zomato and Swiggy doing private labelling and selling food by themselves. In Zomato via Blinkit’s separate Bistro app and Swiggy launching Snacc for quick food delivery.

They have all our data which they do not share with us. For us there is complete consumer masking. We have no reason to not believe them migrating our customer to the products they sell as private labels on their apps. Be it data from a tea brand, biryani or momo. We are definitely considering taking a serious legal route. As long as these aggregators are okay working with restaurants and enable restaurants to go quick, we’re absolutely fine with it but we will not want to be demolished as an industry where they end up selling our similar products. This has not been allowed for even larger ecommerce players operating in the marketplace.

We were always given a verbal assurance by the aggregators that they would never resort to private labelling. This is definitely a breach of trust is what we feel. Our businesses will get severely impacted with these platforms launching their private labels."

The NRAI urges all stakeholders of restaurants, customers and regulators to unite in fostering a fair and competitive food delivery ecosystem.