On October 29, 2024, food safety officials conducted a raid on Zomato's Hyperpure warehouse in Hyderabad, leading to allegations of food safety violations. The inspection revealed 90 packets of button mushrooms labeled with an October 30, 2024 packaging date— a future date when the actual date of packaging should have been listed. Zomato’s CEO, Deepinder Goyal, addressed these allegations publicly on X (formerly Twitter), explaining the incident was the result of a vendor's manual error, which had been identified by Zomato’s quality control (QC) team and rejected before the goods were accepted into the warehouse inventory. “This is not usual, and was due to a manual typing error on the vendor’s side,” Goyal wrote, explaining that their internal technology systems helped the warehouse team flag the mistake quickly.

Goyal further clarified that the vendor responsible for the labeling error had been delisted from Zomato’s supplier database. He emphasized that the Hyperpure facility maintains an A+ rating from the Food Safety and Standards Authority of India (FSSAI), the highest possible rating for food safety and quality control standards in India. The Hyperpure warehouse, situated in Kukatpally, Hyderabad, is an FBO (Food Business Operator) that supplies hotels, restaurants, and caterers with an assortment of products, including fresh fruits, vegetables, meats, seafood, gourmet foods, packaging materials, consumables, and kitchen equipment.

In his posts, Goyal questioned why the incident involving a relatively small number of mushroom packets, valued at approximately ₹7,200 out of millions of rupees’ worth of inventory, was drawing such intense media attention. He implied that certain media coverage might be motivated by an agenda to undermine Zomato’s brand reputation. “Some people benefit from the virality which they get at the expense of pulling down the Zomato brand,” he remarked. Goyal also suggested that media narratives often paint large corporations as inherently flawed or unethical, echoing a common perception that “all big business is bad business.”

Apart from the issue with the mushroom packaging date, food safety officials noted additional concerns. The inspection team reported spotting house flies within the warehouse and found that the building lacked an adequate insect-proof screening system. They also observed that some food handlers were not adhering to standard hygiene protocols, such as wearing hair caps and aprons. However, it was acknowledged that Zomato’s facility had valid licenses, up-to-date medical fitness certificates for food handlers, and pest control records.

Despite the high standards usually maintained at Hyperpure, these observations raised questions about adherence to certain food safety practices. The presence of house flies and inadequate protective measures could suggest lapses in facility cleanliness and hygiene protocols, which are crucial for a facility handling perishable food items.

On the business front, Zomato’s share price reflected the effects of the publicized raid and controversy. On November 4, 2024, Zomato’s shares were trading at ₹241.55 on the Bombay Stock Exchange (BSE), marking a 3.01% decrease or a 7.50-point drop. This decline is speculated to be linked to concerns arising from the recent raid, potentially impacting investor confidence amid food safety allegations.

The situation has brought attention to food safety in large-scale food delivery supply chains, highlighting the necessity for rigorous quality checks and stringent hygiene standards, especially in food storage and distribution hubs like Zomato’s Hyperpure.

(Input from various sources)

(Rehash/Yash Kamble/MSM)