The National Restaurant Association of India (NRAI) on Thursday expressed its “strong opposition” to the recent foray of food delivery giants Zomato and Swiggy into private-label food delivery through quick-commmerce. The industry body said this move undermines the principles of fair competition and poses a significant threat to the viability of thousands of restaurants across India. Calling this as a violation of marketplace neutrality, the industry body said it will be pursuing “legal remedies” in response and approach regulatory authorities. Sources said the industry body is set to approach the Compeition Commission of India on the same.

“The NRAI views this as a clear case of misuse of private labels, infringing upon intellectual property rights under the Copyright Act. We are committed to pursuing all available legal remedies to safeguard the interests of the restaurant industry. This includes filing complaints with relevant regulatory authorities and initiating legal action to prevent Zomato and Swiggy from monopolising the market,” it said in a statement.

Copyright Act infringement

The industry body has accused Zomato and Swiggy, which were originally established as marketplace platforms, of now leveraging their dominant positions and access to restaurant data to venture into private-label food delivery either directly or via their subsidiary. “This strategy not only cannibalises the business of restaurants that rely on these platforms but also raises serious concerns under the Copyright Act and related laws,” it added.

NRAI also said that the platforms’ entry into delivering food through private labelling through quick commerce platforms such as Blinkit Bistro and Swiggy Café / Snacc “fundamentally violates” neutrality, creating an uneven playing field. “By monetising data derived from restaurant partners, they are exploiting a conflict of interest that could decimate the very ecosystem they claim to support,” the industry body stated.

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. Zomato is operating via Blinkit’s separate Bistro app and Swiggy has launched 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 that they are migrating our customers 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,” he added.

Daryani pointed out that the industry has always given a verbal assurance by the aggregators that they would never resort to private labelling and this was a breach of that trust.