21st August, 2019
The Managing Directors/CEO’s/Directors/Partners/General Managers
All FHRAI Members
CC: All Members of the Executive Committee
All Regional Associations
Subject: Formal submission from FHRAI regarding Unethical business practices by Food Aggregators / Call for review of all schemes / Harmonized indulgence with the Food to Food Aggregators
Dear Member (s),
Please be informed that based on the inputs/ suggestions/ complaints received from your end, we - the FHRAI, have submitted to the Food Service Aggregators (FSA’s) a letter consolidating the same with reference to the subject matter which is attached for your ready reference.
We are working on following ‘Action Points’ to get the issues and concerns acknowledged and addressed on behalf of the fraternity: -
- Consult Industry Associations: We believe that the role of Industry Associations has been deliberately kept limited or negligible, which lead to one-way communication, leaving no opportunity for the Industry to have conflict management mechanism in place.
- Profitability: A win-win situation is a need of the hour. With the continuous inflow of Foreign Direct Investment (FDI), e-commerce companies like them, have an edge of the availability of excess funds. However, that’s not the case with restaurants. Hence, any strategy adopted by the e-commerce (FSA’s) should be of direct profit/ benefit to the restaurant industry.
- Unfair Customer Appeasement Practices: With consumer becoming more tech-savvy and, a sharp increase in ordering food online, appeasement practices adopted by the e-commerce companies such as offers and discounts is a dent in the restaurant industry and taking a toll on profits.
- Deliberate Policing: Industry feels that with easy access to the consumer using the e-commerce platform, companies have deliberately started policing the restaurants. Matrix adopted accesses the frequency of orders by a customer or received by a restaurant and then distributes them accordingly.
- Competing with each other: Restaurant industry is a part of the Hospitality industry; however, e-commerce is an information technology platform. It has been observed and experienced on various occasions that rather than acting as a tech service provider, e commerce companies have adopted the policy of competing directly with the restaurants. Eventually, sabotaging the image of the hospitality industry as a whole.
- Legal and Taxation aspect: Agreements signed seem to be always favouring the e-commerce companies (FSA’s). There should be the scope of negotiation depending on the size of the outlet. Also, the taxation aspect not in-line with the rules and regulations such as the collection of GST on delivery charges and including it in the bill.
We would like to assure our Members that the FHRAI is working diligently to take up the matter with the concerned organizations and departments for the welfare of its Members.
Feel free to submit any further inputs.
Best regards,
Rahul Lall
Secretary General
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The Federation of Hotel & Restaurant Associations of India
Regd. Off.: B-82, 8th Floor, Himalaya House, 23 K.G. Marg, New Delhi - 110 001
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Email: fhrai@fhrai.com, Website: www.fhrai.com