Food safety lapses: Brands tighten quick commerce terms

MUMBAI: Following incidents of food safety violations at dark stores operated by quick commerce platforms, brands are renegotiating and tightening their terms of contract with them to ensure that such instances are kept under check.

"Clauses related to storage, handling and hygiene are being renegotiated, especially in the context of dark stores and last-mile delivery...many are also keeping legal options open particularly where negligent handling could trigger consumer claims or regulatory scrutiny," Chandan Goswami, partner at law firm AT & Partners told TOI.

At least half a dozen brands including Marico, ITC, Godrej Consumer Products and Dabur declined to comment. Queries sent to Zepto, Swiggy and Zomato-owned Blinkit did not elicit any responses. Earlier this month, the Maharashtra Food & Drug Administration department had suspended food business licences of Zepto's Dharavi dark store and another managed by Blinkit in Pune's Balewadi area over food safety violations and regulatory non-compliance.

The licences have been reinstated following inspection by authorities and adherence to compliance by the platforms. Brands are now negotiating representations and warranties (as part of the contract), asserting compliance with FSSAI norms and accurate food handling procedures. They are also incorporating robust indemnity clauses to shield themselves from losses or reputational harm arising from platform lapses besides seeking audit rights to get access to dark stores and fulfilment centres for verification, said Dheeraj Nair, partner at JSA Advocates & Solicitors.

"Quick commerce operators can no longer be treated as mere facilitators; they are increasingly viewed as co-custodians of regulated goods. Brands, in response, are revising contracts to force accountability through precise compliance standards and legal safeguards," said Nair.

To be sure, the FSSAI e-commerce guidance and advisories require formal written agreements between brand owners and platforms affirming compliance with FSSAI regulations, legal experts said.

The market for quick commerce or 10-minute deliveries is rapidly growing in India, particularly in the metros where, pressed for time, consumers do not mind paying a bit extra to get groceries and other products delivered at their doorstep in minutes.

The space has expanded to cover a whole host of non-grocery categories including toys, jewellery, electronics and select apparel. A recent report by Kearney said that the quick commerce market is expected to triple between 2024 and 2027 touching Rs 1.5-1.7 lakh crore. Pursuant to recent developments, both brands and quick commerce platforms are likely to increasingly scrutinise the representations and warranties which form a part of their agreements.

This will ensure requisite licences, including those under the Food Safety and Standards Act, 2006 have been obtained and maintained, said Sahil Narang, partner at Khaitan & Co. "The focus will also be on compliance protocols, especially in relation to perishable goods where hygiene and storage standards are critical," Narang said.


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