Photo: iStockphoto
Photo: iStockphoto

More restaurant associations join Logout campaign against food aggregators

  • Over the next few days more restaurants and large hotel chains are expected to log out of Zomato’s Gold dine-in program that was at the centre of conflict between restaurants chains and food aggregators
  • The associations said they are protesting against issues around deep discounting, higher commissions and dark kitchens among other issues

NEW DELHI : Almost two months after hundreds of restaurants logged out of food aggregators, especially Zomato, in a mark of protest against hefty discounting and offers doled out by them to diners, two more industry associations representing hotels and restaurants have extended their support to the Logout campaign.

Over the next few days more restaurants and large hotel chains are expected to log out of Zomato’s Gold dine-in program that was at the centre of conflict between restaurants chains and food aggregators.

On Wednesday, the Federation of Hotel and Restaurant Association of India (FHRAI) which is an apex body representing the hotel industry in India said it will back the National Restaurant Association of India's (NRAI) #Logout protest that started in August. The move initially saw 300 restaurants signing out of Zomato's membership-driven Gold on dine-in program and gradually spread to several other cities and restaurants. The FHRAI is joined by other small, regional restaurant associations such as the Thane Hotel Association, Pune Restaurants and Hotel Association (PRAHA), NHRA, Vadodara Food Entrepreneurs (VFE) who will now extend their support to the movement by logging out of Zomato's signature membership Gold program on dine-in.

The associations said they are protesting against issues around deep discounting, higher commissions, dark kitchens, bundling of services, data masking among several other concerns in a bid to establish a more level playing field that will benefit both restaurants and food delivery companies.

More associations joining the NRAI will send out a message to food aggregators against their "highly-detrimental and predatory trade practices," said Anurag Katriar, President, NRAI. Katriar added that several city-based and affiliated bodies joining the campaign strongly indicates that the pain is being felt across the entire industry.

"Food aggregators cannot decide or dictate commercials terms to and on behalf of the Industry," said Gurbaxish Singh Kohli, President, Hotel and Restaurant Association of India (HRAWI) and Vice President, FHRAI.

Food aggregators that have become increasingly big in India's eating out and dining market have been facing resistance from restaurants both large and small that have accused aggregators of dictating terms and agreements not conducive to eateries. As a result, the two parties have been holding meetings to reach a level-playing field. Last month, representatives of Zomato, and Swiggy met with top members of the NRAI after the latter raised concerns that unfair practices such as steep discounts and bundling of services was hurting business at eateries in India.

Over the last two months, Zomato also made several changes to its Gold on dining-in program, a move that was not fully acceptable to the NRAI. It also put on hold a

Zomato, in the meanwhile, also rolled out its Gold program on delivery much against the dislike of food chains. The company said it had already signed up 10,000 restaurants that were part of its program that now offers complimentary deals on in-home delivery.

In its half yearly update released earlier in October, Zomato said that the Logout protest had limited impact on its business as the number of restaurants on its Gold (on delivery) platform stood at 6,300. The number was at 6,100 when the protest had started. “In addition to that, we have 10,000 restaurants that are participating in recently launched Zomato Gold for delivery (more on how successful this has been in a few weeks)," the company said in its half yearly update.

The Logout protests first started on 15 August, after 300 restaurants in Gurugram said they would pull out of these platforms. The #Logout move picked pace over the next few days. As of now, more than 3,000 restaurants remain logged out of Zomato Gold, according to NRAI.

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