CCP asks food company to refrain from indulging in deceptive marketing practices

ISLAMABAD: The Competition Commission of Pakistan (CCP) has directed a renowned multinational food company to refrain from deceptive marketing practices by declaring their products better version of milk.

According to an order issued by the CCP, the commission has passed an order in a case involving a prominent multinational company, which was accused of violating section 10 of the Competition Act, 2010, cautioning it to refrain from deceptive marketing practices.

The CCP received a formal complaint from Parent Pakistan (SMC-Private) Limited alleging that the company had resorted to deceptive marketing practices by disseminating false and misleading information to consumers.

As per the complaint, the product packaging, labelling, television commercials, advertisements as well as statements made on the company’s official website and social media platforms in respect of their three products were deceptive and in alleged violation of Section 10.

The company was accused of disseminating deceptive information without any reliable scientific data, which caused an impression to the consumers that the products are actually milk without reasonable basis related to characters, properties, suitability of use or quality of the products in violation of section 10 (2)(b) of the Act.

It has also been alleged that the company resorted to misleading comparison of goods in the process of advertising by not only comparing of the product to milk but also claiming that it is a better version of milk, hence violated Section 10 (2)(c) of the Act.

The Commission constituted an enquiry committee to probe the matter and after evaluating facts and responses, the enquiry report found that the company has been involved in violation of Section 10 of the Act. A show cause notice has been issued to the company thereof.

During hearings, the company assured its commitment towards compliance and said that all the alleged marketing material under investigation is claimed to be older versions of advertisements which is not currently on media anymore.

The Commission was apprised on its compliance oriented approach in that the old archived record of its website and social media platforms contained few of the alleged advertising material, however, the material has been removed from the archives.

The company also claimed that it has duly complied with the orders of the Supreme Court of Pakistan about disclosure on the product packaging to the effect that the product is “not natural milk”.

The Commission felt disappointed that the complainant has not appeared before the Commission throughout the hearings which certainly reflects a non-serious conduct on part of the complainant vis-à-vis the allegations made against the company.

The CCP order stated that with respect to enforcement under Section 10 of the Competition Act, a compliance oriented approach has been appreciated, therefore, in the given facts and circumstances, the commission is inclined to take a lenient view and not impose any penalty where contravention is made out but has been rectified and duly addressed.

In this regard, the company has provided due disclosers, discontinued the impugned advertising material and has consistently committed to refrain from any such deceptive marketing practices and to ensure compliance with the provisions of the act. The respondent is strongly cautioned not to repeat any such conduct in future.

The order states that “we wish to encourage undertakings towards compliance and corrective behaviour and in the given facts and circumstances, we wish to record appreciation for the counsels and the representatives in duly addressing concerns arising from the enquiry report,” the CCP order added.

Copyright Business Recorder, 2022