Zomato Removes Policy Penalising Restaurants for Lower Dine-in Prices

Eternal-owned Zomato, has removed a clause from its restaurant agreements that required price parity across platforms, as per Reuters reports. The term had asked partner outlets to keep menu prices on the app in line with those offered at dine-in counters or on their own websites. 

The clause was part of standard contracts for several years. Updated documents reviewed recently no longer include this provision. 

Details of the Earlier Clause 

Under the earlier agreement, restaurants could face penalties if they listed lower prices outside the platform. The contract allowed fines of up to 3 times the price difference per order. 

It also permitted checks through customer complaints and “mystery shopping”, where outlets could be reviewed without prior notice. These measures were meant to identify pricing gaps between online and offline menus. 

Enforcement and Response 

As per the report, the clause was not enforced in practice. However, it remained a concern for restaurant operators due to its presence in formal agreements. 

The National Restaurant Association of India had raised objections, stating that such terms limited pricing decisions. The industry body represents over 500,000 outlets across India. 

Wider Context 

Similar clauses have drawn attention to other sectors. In 2022, India’s competition regulator directed travel platforms to remove restrictions that prevented hotels from offering lower prices on other channels. 

Legal experts have pointed out that such provisions can affect how businesses compete, especially in markets where platforms play a central role in customer access. 

Operational Environment 

The change comes at a time when restaurants are facing higher input costs. LPG prices have risen since March, partly due to supply disruptions linked to tensions in West Asia. This has affected kitchen operations and delivery volumes in some cases. 

Zomato had also discussed changes to its commission model last year, but no revisions were finalised. 

Financial Overview  

Zomato’s parent, Eternal, reported an operating profit of ₹547 crore for the December quarter, up 27% year-on-year. Revenue from the food delivery segment stood at ₹2,676 crore, a 29% increase. 

Read More: Govt Clears 3-Year Extension for Bank of India, Bank of Baroda MDs Ahead of Term End! 

Eternal Share Price Performance  

As of April 24, 2026, 1:12 pm, Eternal Ltd share price was trading at ₹253.79, down 2.36% from the previous closing price. 

Conclusion 

The removal of the clause alters a key condition in restaurant contracts. Pricing control now rests fully with partner outlets, while cost pressures and competition in the sector continue. 

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