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Retailers displeased as Swiggy, Zomato start delivering alcohol

, ET Bureau|
Last Updated: May 28, 2020, 02.59 PM IST
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Swiggy said it has partnered with HyperVerge to enable AI-face recognition for mandatory age verification and user authentication for these deliveries after seeking necessary approvals.

Highlights

  • Retailers are concerned about a possible loss of their database.
  • A retailer in Ranchi believes that food delivery apps can misuse retailers' database.
  • Sumeet Chawla, VP, Association of Progressive Retail Liquor Vendors in Mumbai said the liquor shops in Mumbai and other cities in the state were quite capable of delivering alcohol themselves.
NEW DELHI: Food delivery apps Zomato and Swiggy said on Tuesday they have started delivering alcohol in Odisha after Jharkhand through a new 'wine shops' category, but wine merchants and retailers in the trade are not happy with the move.

Liquor retailers in states like Maharashtra, Odisha and Jharkhand don’t want food delivery apps entering the highly state centric and excise regulated liquor space.

Previous run-ins of food delivery apps with standalone restaurants, a log out campaign by restaurants against food delivery apps and a possible loss of their database are among their concerns.

A BMC order dated May 22 by municipal commissioner Iqbal Singh Chahal allowed home delivery of alcohol by liquor shops outside of the containment zones. "E-commerce platforms may be utilised by liquor shops permitted to do home delivery," he wrote.

But, a previous excise order issued by the state’s excise department dated May 13 while allowing home delivery of alcohol by retailers outside of containment zones made no mention of online, e commerce companies. As per the May 13 order, infrastructure for delivery was to be created by shop owners and customers could place orders to these retailers on WhatsApp, mails or phone calls.

Sumeet Chawla, VP, Association of Progressive Retail Liquor Vendors in Mumbai said the liquor shops in Mumbai and other cities in the state were quite capable of delivering alcohol themselves.

"We have conveyed to the government that we can deliver ourselves. We cannot ensure safeguards if these external apps take orders and do last mile deliveries. There will be no control. Many small retailers will also lose their bread and butter. There are trust issues with these apps because of what happened with restaurants. We think initially they were okay with everything that the restaurant owners were saying but once they had the hold and scale they were dictating terms," he said.

On May 23, Odisha’s excise department allowed home delivery of alcohol by retailers and stated they could do so directly or through food aggregators and standard technology platforms who could obtain no objection certificates (NOCs) from the excise commissioner. Both Zomato and Swiggy obtained these NOCs.

Swiggy said starting with Bhubaneswar and Rourkela, its services for home delivery of liquor will be launched in Cuttack and Berhampur in the next couple of days. Zomato said beginning with Bhubaneswar, it will soon expand to other cities like Rourkela, Balasore, Balangir, Sambalpur, Berhampur and Cuttack. Zomato said the app will only feature licensed retailers, who have applied for the service.

Rakesh Ranjan, Vice President at the company said Zomato was also in advanced stages of discussions with other state governments. “Alcohol delivery has multiple complexities and intricacies, unique to this category. While there have been a few hiccups in launching it; we are working closely with the excise department and retailers and retailer associations to solve these,” he added.

Swiggy said it has partnered with HyperVerge to enable AI-face recognition for mandatory age verification and user authentication for these deliveries after seeking necessary approvals.

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But Yogesh Sahu, a liquor retailer in Odisha who has stores in Bhubaneshwar, Bhawanipatna, Nabarangpur and Sundargarh and is also a member of the state’s liquor vendors association said most retailers in the state were very apprehensive.

“In Odisha, wholesale liquor supply is controlled by government. We buy from the government and have very fixed margins. We fear these delivery apps will destroy our margins and we will lose our data,” he said.

Tiplur Beverage Technology Enabler, a startup founded by Rakshat Chopra, former VP of SAB Miller India is also in talks with various state governments and filed an application with the Odisha government on Tuesday.

Chopra said retailers seemed to be okay with his model as his app lets them deliver.

“Our platform ensures all excise mandated rules of consumption and retailing are inbuilt as per user location. The data will stay with retailers and they will do home delivery so our app will guard their captive business,” said Chopra.

"We don’t show product images as in many states in India that’s not allowed even at the store level and all retailers are listed alphabetically regardless of the size," he added.

Ajay Kumar, a retailer in Ranchi said he thought food delivery apps could misuse retailers’ database.

Ajay Deshmukh, secretary of the Pune District Wine Merchants Association said there isn’t much enthusiasm among vendors in the city for home delivery.

“There are 69 containment zones and many housing societies are not allowing delivery staff. Our margins are hardly 8%....online frauds that have taken place during the lockdown is another concern for us with regards to online home delivery as neither police nor the excise department has any control over them,” he said.

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