‘Deceptive marketing practices’ LHC allows CCP to proceed against 3 food companies

ISLAMABAD: The Lahore High Court (LHC) has granted authorization to the Competition Commission of Pakistan (CCP) to proceed against three leading food companies involved in deceptive marketing practices.

This decision comes as a result of the court’s recognition of the CCP as the primary authority responsible for addressing competition-related matters, affirming its status as the original forum for such issues.

The cases originated from enquiries initiated based on formal complaints lodged by three companies including M/s. Ismail Industries, M/s. Hilal Foods, and M/s. English Biscuit Manufacturers against M/s. SM Food Makers Limited and M/s. Volka Foods. The complainants accused the latter parties of engaging in deceptive marketing practices, contravening section 10 of the Competition Act, 2010.

The CCP’s investigation concluded that SM Foods and Volka Foods had engaged in the practice of free riding by utilizing trademarks, product labelling, and packaging of the complainants without authorization. This act of unauthorized usage, prima facie, violated Section 10 of the Act. Subsequently, CCP, relying on the findings and recommendations of the Enquiry Reports, issued Show Cause Notices to SM Food Makers Limited and Volka Foods.

Upon receiving the Show Cause Notices, SM Food Makers Limited challenged the legality of the notices before the Lahore High Court, Multan Bench Multan. Subsequently, three separate writ petitions were filed by SM Food Makers, urging the court to nullify the Show Cause Notices.

After thorough deliberation and hearing arguments from all parties involved, the Lahore High Court, Multan Bench Multan, dismissed all the constitutional petitions and referred the matter back to the CCP, recognizing it as the original forum responsible for addressing competition-related issues. The court directed the petitioner, SM Food Makers Limited, to file a response to the Show Cause Notices within 30 days and raise all objections before the CCP.

Additionally, the court emphasized that competition laws offer a remedy through the appellate forum, which possesses the competence to address all factual and legal disputes related to the case. Consequently, the court deemed it inappropriate to render a definitive judgment at this stage without undergoing due process.

This court ruling enables the CCP to proceed with the case and conduct hearings into the abovementioned complaints. The decision upholds the principles of fair competition and demonstrates the court’s confidence in the CCP as the competent authority to determine the outcome of such cases.

As the proceedings resume, the CCP is expected to thoroughly examine the evidence and arguments presented by both sides, ultimately working towards ensuring a fair and just resolution under the competition law of Pakistan.

Copyright Business Recorder, 2023