Meituan Dianping Must Scrap Monopolistic Terms, Guangdong F&B Alliance Says

ZHANG YUSHUO

(Yicai Global) April 13 — A southern Chinese catering alliance has warned Meituan Dianping that it may face legal action if the dominant takeout platform in Guangdong province doesn’t stop limiting restaurants’ partnerships with other service providers and cut fees to ease food outlets’ plight amid the Covid-19 pandemic.

“We advised Meituan Dianping in a letter and hope that it can take positive measures to avoid lawsuits regarding antitrust and unfair competition,” the 21st Century Business Herald reported yesterday, citing the Guangdong Restaurant Association.

If nothing changes, restaurants will be forced to take legal action or support new platforms, the GRA said in a letter posted on WeChat on April 10. The alliance will also cooperate with national and provincial peers to protect domestic restauranteurs’ rights.

The Beijing-based lifestyle service provider takes up to 26 percent of new partners’ sales, which is too much, the alliance wrote. The fee should be cut by at least 5 percent during the pandemic, it added.

Restaurants around China have been severely hit by cash flow issues and social distancing measures so takeout has become a lifeline for many. Amid shutdowns, nearly four-fifths of surveyed companies said that their revenues equaled less than 30 percent of the tallies during the same period of last year, according to data presented by the GRA.

Meituan Dianping’s takeout market share in the province has exceeded 60 percent, which is detrimental to fair competition, said the alliance. The firm makes new participants sign exclusive cooperation contracts which prohibits them from working with rivaling service providers such as Ele.me, which must stop, it added.

Editor: Emmi Laine