Colombian on-demand delivery online company Rappi sold liquor to minors, had misleading advertising and made double charges, the Colombian Superintendency of Industry and Commerce (SIC) found and therefore imposed a sanction against the delivery company for more than 1,200 million pesos, about $250,000. Movendi International member organization Red PaPaz (Colombian Association of Fathers and Mothers) had filed the claim before the SIC against Rappi S.A.S (Rappi) in 2019.

In a video that Red PaPaz had submitted to the Superintendence of Industry and Commerce (SIC) as evidence in an investigation against Rappi, the on-demand delivery company is seen delivering two bottles of liquor to a 15-year-old boy who had made an online order to buy them. This is revealed by the decision of the SIC to sentence Rappi in the first instance with a million-dollar fine for violating consumer rights. The decision was confirmed earlier this week after an appeal process of more than a year:

There is no appeal against this decision,” reads the entity’s press release, as per El Pais reporting.

Superintendencia de Industria y Comercio (SIC)

According to the SIC’s analysis of the video, Rappi’s sales associate did not request the minor’s identity documents to verify his age. In Colombia alcoholic beverages can only be sold to people over 18 years of age.

The service offered by Rappi S.A.S., apparently does not satisfy the inherent and attributed characteristics, since it does not guarantee that minors do not have access to products that are harmful to health, such as intoxicating beverages,” reads the resolution, as per El Pais.

Superintendencia de Industria y Comercio (SIC)

Alcohol online retail and on-demand delivery company fails to protect children

The SIC reviewed several similar videos and other evidence, such as reviews of the security controls on the Rappi page to establish whether the company does everything necessary to not sell liquor and other prohibited substances to minors. In this investigation the SIC established that Rappi was in breach of the provisions of article 6 of the consumer statute (Law 1480). The alcohol online retail and on-demand delivery company has been found to fail to protect children in Colombia.

María del Socorro Pimienta, superintendent in charge, explained through a video that the sanction is mainly due to the deficiency in the quality of Rappi’s service in four aspects:

  1. in addition to the sale of liquor to minors,
  2. misleading advertising ,
  3. double charging consumers, and
  4. non-compliance with delivery times.

The sanction amounts to 1,245 million pesos, about $250,000.

In legal terms Rappi is an alcohol supplier and must comply with minimum standards related to “the quality and suitability of the service, responsibility for advertising and minimum information provided to consumers, as well as the obligation to protect children and adolescents in electronic commerce” .

In relation to misleading information and advertising, El Pais reports that the resolution says:

Rappi S.A.S. omitted the warning legend in the advertising of products harmful to health, since it did not include information about its harmfulness in the advertising of alcoholic beverages, nor was it informed about the conditions for its correct consumption and its contraindications”.

Superintendencia de Industria y Comercio (SIC)

Rappi, operates in 250 cities in nine countries and has some three million users, according to El Pais. The delivery company is not going through its best moment. Its rapid expansion throughout Latin America and the sustained growth it had since it was born in 2015 until the pandemic seem to be coming to an end. According to internal financial reports published by EL PAÍS in December 2022, its sales in 2021 fell by 32.8% compared to 2020, a year in which mandatory quarantines triggered their use. This economic collapse will create pressure for Rappi to use even more greedy and ruthless business practices.

A recent investigation by the Ministry of Labor for alleged “non-compliance with occupational health and safety regulations” as well as fine imposed by the SIC are clear indications of the need to better regulate alcohol online retail and on-demand delivery companies, such as Rappi.

The exposure of minors to alcohol, the misleading advertising, and the other two violations illustrate the pervasive problems of alcohol online retail and on-demand delivery,” says Kristina Sperkova, International President of Movendi International.

Alcohol companies have no regard for the health and rights of our children. I thank our members at Red PaPaz for taking action to protect children and youth and congratulate them for this important victory.

We know that these harmful alcohol industry practices are growing problems around the world and Red PaPaz’ action will serve as inspiration for other members of Movendi International to take similar action.”

Kristina Sperkova, International President, Movendi International

Red PaPaz v. Rappi S.A.S

On December 2, 2019, the Colombian Association of Fathers and Mothers (Red PaPaz) filed a claim before the Colombian Superintendency of Industry and Commerce (SIC) against Rappi S.A.S (Rappi), a Colombian on-demand delivery online company, for the lack of mechanisms on Rappi’s e-commerce website and mobile app to ensure that minors do not search and buy harmful products (such as alcohol and tobacco products).

Specifically, the complaint alleged that minors could access, purchase, and receive alcoholic beverages and tobacco products through Rappi’s website without any significant limitations and without their age being verified at the time of purchase and delivery.

This lack of protective measures violated the norms for the protection of minors established in Colombia’s Law No. 1801-2016, Childhood and Adolescence Law. The complaint filed by Red PaPaz was investigated jointly, with many additional complaints filed by Colombian consumers against Rappi due to a series of infringements of the Colombian Consumer Protection Law.

Upon completing the investigation, SIC verified each of the infractions reported by Red PaPaz and several other consumers and fined Rappi approximately $312,000.00 USD in May 2022. The decision had been challenged by Rappi at the time.

The problems with alcohol on-demand delivery and online retail

Colombia is not the only country where greedy alcohol companies deploy harmful practices to push alcohol on minors and other vulnerable groups through online retail and on-demand delivery. Movendi International is tracking the issue globally and has published more than 50 articles since 2019.

The problems are clearly getting worse – as these companies expand and push for profit maximization.

In addition to Colombia and other Latin American countries, alcohol online retail and on-demand delivery is causing serious harm around the world, for example in:

  1. Kenya: Home Delivery Fuels Alcohol Harm (2020),
  2. Thailand Plans to Ban Alcohol Online Sales (2020),
  3. UK: On-Demand Alcohol Delivery Firms Criticized for Fueling Alcohol Harm (2020),
  4. Netherlands: Biggest Web Shop Suspends Alcohol Sales, Delivery (2020),
  5. India: Big Alcohol Thirsts For E-Commerce Market (2020),
  6. Sweden: Court Stops Winefinder from Selling Alcohol Online (2020),
  7. Australia: Boom of Alcohol On-Demand Delivery Fuels Rise in Alcohol Harm (2021),
  8. South Korea: Alcohol Industry Pushes for Worsening Alcohol Online Retail Regulations (2021), and
  9. U.S. Regulator Clamps Down on Alcohol Delivery Service Drizly After Data Breach (2022).

An investigation in Australia showed in 2022, that alcohol companies fail to implement mandatory electronic age verification for same-day alcohol deliveries in New South Wales, Australia. The NSW government had committed to several reforms of online alcohol sale and delivery when they adopted the NSW Liquor Amendment Bill in 2020. The investigation highlighted the government’s reliance on self-reporting age verification and a signed statement instead of the more comprehensive electronic age verification failed to protect minors and other vulnerable groups.

Alcohol online retail and on-demand delivery has expanded aggressively, especially during the coronavirus pandemic. For instance, a 2020 study from New Zealand found that purchasing online alcohol delivery during pandemic restrictions was linked with heavier alcohol use (75% higher odds) in the past week. Researchers concluded that the rapid expansion of online alcohol delivery coupled with a lack of regulatory control required public health policy attention.

Source Website: El Pais