Malls put eateries under scrutiny amid govt's hygiene crackdown

New Delhi: India's leading malls intensified scrutiny on restaurants and cafes in their premises, issuing fresh alerts to food and beverage (F&B) tenants on keeping strict hygiene and food safety protocols amid widening crackdowns by regulators, emphasising any violation can dent the image of the entire shopping complex.

Several malls emailed reinforced guidelines to hundreds of restaurants, cafes, and bars over the past 10 days, executives said. DLF Malls, Phoenix Group, and Prestige are among mall operators to issue fresh hygiene and safety alerts to their F&B outlets, said executives with knowledge of the developments.

While the crackdowns so far have been led by Maharashtra Food and Drug Administration (FDA) and Karnataka Food Safety and Drug Administration, mall operators across India specially in tier-1 and 2 cities have reiterated hygiene and safety protocols, they said.

Mall operators said while they closely follow crucial protocols such as food hygiene and fire safety as an ongoing process, the recent crackdowns have brought violations and lapses in public domain, directly risking malls' reputation.

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"We are very concerned about recent hygiene and food safety protocols being breached," according to an emailed alert sent to a prominent QSR chain by a leading mall operator, reviewed by ET. "While checks by mall management are in place, all tenant partners may note that lapses that come to light risk reviewing contract terms and strict penalties as it amounts to reputational damage of mall premises." The mail further noted "zero tolerance" on food safety lapses.

"It's not just about the reputation of the restaurant," said Dalip Sehgal, chief executive at private equity firm Blackstone-backed Nexus Select Malls, which operates 19 malls across 15 cities. "The mall's credibility is at stake too. There are times when we had to take a hard call, and we continue to do so. We do routine audits and take them very seriously." Underlining that such protocols "can't be treated as one-time developments", he said "it's critical that standards are maintained and be part of the DNA of any F&B business." Nexus Select Trust, the entity under which Nexus Select Malls operate, gets more than 135 million consumer footfalls annually, according to company data.

"Following safety guidelines is part of agreements we have with food outlets," said Muhammad Ali, chief executive, retail, at Prestige Group, which runs five malls in South India. "From time-to-time, we check whether they are following the protocols. Food quality is something we can't check, but we make sure cleanliness is maintained and it is part of our responsibility as well."

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Recent days have seen regulators either suspend or seal licences of KFC's godown in Mangaluru's City Center Mall, and Punjab Grill in Seawood Mall, and Domino's in R-City Mall in Mumbai.

Revenue contribution of F&B at leading malls has surged 30-40% over the past year, compared to retail sales contributed by fashion and entertainment, with restaurants and cafes becoming anchor tenants in various top-tier malls.