New Delhi: Multinational pizza chain Domino’s might discontinue taking orders from the popular online food delivery platforms, Zomato and Swiggy, if their commissions increase further, as per a report in Reuters. This disclosure was made by Domino’s holding firm Jubilant FoodWorks in a confidential filing with the Competition Commission of India (CCI) which is investigating alleged anti-competitive practices of Zomato and Swiggy.Also Read – Jai-Veeru, Is That You? Swiggy Delivery Guy Helps His Zomato Counterpart, Unlikely Dosti Wins Hearts | Watch
Jubilant is India’s largest food services company, with more than 1,600 branded restaurant outlets including 1,567 Domino’s and 28 Dunkin outlets. Also Read – Viral Video: ‘Swiggy Delivery Boy On Horseback’ Identified, ‘Horse-hunt’ Ends
The company, according to a Reuters report, in a letter to the CCI on July 19 said, “In case of an increase in commission rates, Jubilant will consider shifting more of its businesses from online restaurant platforms to the in-house ordering system.” Also Read – Viral Post: Mumbai Man Shares Food Order Bills From Zomato And Restaurant; Comparison Triggers Debate
The CCI ordered in April its probe into Zomato and Swiggy after an Indian restaurant group alleged preferential treatment, exorbitant commissions and other anti-competitive practices. However, the food delivery apps denied any wrongdoing.
As part of the response, Domino’s India also said that during July, about 27 per cent of its business in India was generated from online platforms, including its mobile app and website.
Jubilant’s warning to Zomato, Swiggy
Jubilant’s warning comes as Zomato and Swiggy face accusations by many restaurants in India that their alleged practices hurt their business. The CCI case was sparked by a complaint from the National Restaurant Association of India, which has more than 500,000 members, and alleges that commissions charged by Zomato and Swiggy in the 20% to 30% range were “unviable”.
A senior industry executive with direct knowledge said that Zomato’s and Swiggy’s commissions were a concern for Domino’s and many other restaurants. “If commissions are increased further, they will lead to profit squeeze of businesses and will simply be passed on to consumers,” Reuters reported a executive as saying, who declined to be named.
Before the investigation was announced, Zomato told the CCI it negotiates and charges commissions from restaurants but they had no bearing on how listings appear on its app. Swiggy stated that its commissions were determined by factors such as a restaurant’s popularity or the volume of orders, according to the watchdog’s initial order.