Discounts by aggregators worry hotel association

The Federation of Hotel and Restaurant Association of India (FHRAI) recently raised issues and concerns of the restaurant industry arising from the discounting and pricing practices of the food services aggregators (FSAs), before the Department for Promotion of Industry and Internal Trade (DPIIT).

Sources in the association said that the government has agreed to look into some of the issues raised by them.

The federation also expressed reservations about the proposal of placing FSAs and restaurants together as part of the same industry and has proposed solutions to regularize the operations of the FSAs.

Vice-president of FHRAI Gurbaxish Singh Kohli said, “We have proposed specific solutions to the DPIIT to regulate the business practice of FSAs in order to safeguard the interests of the restaurant industry. We have appealed to the DPIIT to advise FSAs to stop the deep discounting of products offered by restaurants. We have also communicated to the ministry of commerce and industry that FSAs float impractical discounts. Discounting a product by 50% and other similar offers is causing loss of image to individual restaurants.”

He said that at present, FSAs demand commissions ranging from 20% to 30%, adversely affecting the revenues, business and livelihood of a restaurant owner. The commissions should be rationalized in the range of 5 to 10%, Kohli stated.

Sources said that a restaurant has to obtain multiple approvals and licenses apart from investing in huge capital to commence operations but FSAs are providing platforms to “illegally operated” ‘cloud kitchens’ or ‘dark kitchens’.

“FSAs exhibit rosy food pictures to represent such illegal kitchens and misguide unsuspecting consumers into ordering food from such places that may be operating without any hygiene standards. One of our appeals is for FSAs to conduct operations based on the quality of service and efficiency,” said Pradeep Shetty, joint honorary secretary, FHRAI.

Source:-https://retail.economictimes.indiatimes.com/news/food-entertainment/food-services/discounts-by-aggregators-worry-hotel-association/70158615