CCP imposes fine on dairy companies for violation of competition act
The Competition Commission of Pakistan (CCP) has passed an order imposing fines of Rs 62.29 million on Engro Foods Limited (EFL), Rs 2 million on Noon Pakistan Limited (NPL), and Rs 500,000 on Shakarganj Foods Products Limited (SFP) for violating Section 10 of the Competition Act, 2010.
The order has been passed by the CCP’s bench comprising Chairperson Vadiyya Khalil, members Dr Shahzad Ansar and Ikram-ul-Haq Qureshi. The order disposes off the show cause notices issued to these companies after an inquiry conducted by CCP found that the aforementioned companies were prima facie deceiving consumers by marketing and selling tea whiteners and dairy drinks including SFP's product 'Qudrat' (liquid tea whitener), NPL's product 'Dairy Rozana' (dairy drink) and EFL's product 'Dairy Omung' (dairy drink) as milk.
The order found that EFL in its marketing campaign for its product ‘Dairy Omung’ , particularly the television commercial, gave the net impression that ‘Omung’ is milk, and not a dairy drink, while the company’s website termed ‘Omung’ as an alternate to loose milk, thereby deceiving the unsuspecting consumer. The order further noted that the packaging and labeling of NPL’s product ‘Dairy Rozana’ gave a general net impression that the product is milk, not a dairy drink thus deceiving the consumers about the product.
Regarding SFPL’s product ‘Qudrat’, the order found that the labeling on the packaging was deceptive in the absence of a proper and sufficient disclosure about the product.
CCP’s order states that the when material information pertaining to products or services is inaccurate or incomplete, it is likely to mislead consumers and affect competitors, in violation of Section 10 of the Competition Act.
The penalties have been imposed on the companies relative to the severity of the violations and their likely impact on competition in the market. Furthermore, the companies have been warned not to violate the provisions of competition law in the future.