Restaurant bodies across India have joined together to protest deep discounting
Zomato has been singled out in their latest statement
Food aggregators cannot represent the entire industry, NRAI said
The National Restaurant Association of India (NRAI), a restaurant body which had initiated a twitter campaign against Zomato’s Gold subscription programme in August has now received support from the apex restaurant industry group of India.
The Federation of Hotel and Restaurant Association of India (FHRAI) said that it supports the logout movement and said that the fact that several city-based and affiliated bodies joining the campaign strongly indicates the pain being felt across the industry. The support was announced at a joint event held in Mumbai on Wednesday (October 16).
Along with FHRAI, several other associations such as AHAR, Thane Hotel Association, Pune Restaurants & Hotel Association (PRAHA), NHRA, Vadodara Food Entrepreneurs (VFE) have also unitedly joined the #Logout movement. Interestingly, while the Wednesday announcement was aimed at all food aggregators and restaurant discovery platforms, the only company mentioned by name in the press release was the Deepinder Goyal-led Zomato.
The associations said that they were protesting the deep discounting and “lop-sided” agreements designed by aggregators. “Aggregators cannot dominate the Industry or conduct its business in a manner that is detrimental or negatively impacts the Industry’s growth or profits,” Gurbaxish Singh Kohli, vice president, FHRAI said.
The two industry bodies also raised the issue of private labels by aggregators, delayed payments and arbitrary change in terms of engagement.
NRAI has been continuously in talks with Zomato, Swiggy, EazyDiner, Dineout and a host of other foodtech startups since August and sources close to the matter have told Inc42 that it has sorted out its issues with all the parties except Zomato.
The Logout movement was started on August 14 when 300 restaurants under NRAI started a twitter campaign with the hashtag #Logout to announce that they were delisting themselves from platforms such as Zomato Gold, EazyDiner, Dineout’s Gourmet Passport, Nearbuy, MagicPin among others.
However, since then Dineout has clarified the communication around its discounting policy for customers and also clarified how its Gourmet Passport loyaty programme works, which convinced restaurants to log back in to Dineout and Gourmet Passport.
The main pain point between NRAI and Zomato has been the very successful Zomato Gold programme, which offers one-on-one offers on food and drinks to dine-in customers at partner restaurants. In September, Zomato diluted the programme but introduced the Gold offering on delivery as well, which led to further discontent among NRAI members.
“This group also unanimously agreed that the Zomato Gold is an extremely detrimental product for the Industry and strongly opposes the same. It is clothed in such a manner that it misleads a few gullible members into disastrous consequences “ Anurag Katriar, president, NRAI, said on Wednesday.
The groups also said that they will no longer see online food delivery platforms as partners and will henceforth recognise them as “Ancillary Service Providers.”
“It (FHRAI and NRAI) will in no way allow these ‘ancillary service providers’ to be considered as ‘partners’ which nomenclature has been conveniently abused to confuse everyone into thinking they represent the primary business of hospitality and food service,” FHRAI head Kohli said.
