In a practice that not only misleads 180 million Pakistanis but also remains unnoticed by the country’s consumer watchdog body for the last four years, the Brands Foundation has been giving “Brands of the Year Awards” exclusively for money — a deceptive marketing practice, violating the Competition Act 2010.
An initiative of the Exhibitor Group of Companies – the parent organisation of the Brands Foundation and the sole sponsor of the awards – the Brands of the Year Award is distributed every year by the prime minister at an elaborate ceremony.
When questioned about non-transparency in awarding these accolades, the organisers offered weak arguments to justify the controversial selection of top brands in many categories. They also refused to share the details of consumer surveys as well as names of the second and third contenders for any category.
“It is not only totally irrelevant for a news story but it reflects that you have some other intentions behind such queries,” Shaikh Rashid Alam, founder and chief executive officer (CEO) of the Exhibitor Group of Companies, said.
An investigation by The Express Tribune, however, has revealed serious malpractices in the manner the award has been given out.
A careful study of the Pre Event Report (for 2010 awards) and background interviews of industry sources strongly indicate that money was a top criterion for awarding the accolade. It was also found that, in many categories, some brands won the title only because the competition either refused to participate or denied paying a participation fee of Rs125,000 — which is charged only from winners, according to Alam.
“They want a payment for the awards, which I feel is not the right thing to do,” said Nilofer Saeed, owner of the Hobnob Group. “Any award must be given on merit,” she insisted, “these should not be paid for”.
Hobnob was featured amongst the 100 fastest growing companies in the Arabia500 Summit, Turkey – a ranking of the fastest growing young companies in the Middle East and North Africa, Turkey and Pakistan.
The award in Pakistan, however, went to United King bakery.
In the category of spices, Brands Foundation selected Mehran Spices as best exporting brand in both 2007 and 2010 — ignoring Shaan Foods, irrefutably a giant in the exports of spices.
“Paying money for getting praised is not our policy,” Shaan Foods Chief Operating Officer (COO) Faisal Mubin Ganatra said while responding to a question.
When they first picked this category a few years ago, Ganatra said, Brands Foundation did not even contact Shaan Foods. “We export our products to 65 countries; we are a big player in the spice category,” he said. “This is not how superior brands are selected,” he asserted. “Now they are trying to contact Shaan Foods because they want the money [participation fee].”
To justify the selection of brands that are not market leaders but are close contenders, Alam said: “If the top brand doesn’t want to participate, the closest contender is given the title. And if the closest contender doesn’t participate, the category is dropped.”
World Call won the top brand title in the category of broadband internet services in 2010. The Karachi-based broadband provider, according to the Pakistan Telecommunication Authority, had only 11% market share that year as opposed to PTCL’s 55% followed by Wateen that had 25% — facts that refute the CEO’s claim that only close contenders are given the award when leading brand doesn’t participate.
“The Brands Foundation asked my company to participate in a category we didn’t even contribute to,” a source from one of the leading brokerage houses said on the condition of anonymity. “You sponsor the award by paying the entry fee, we will do the rest,” the source quoted Brands Foundation as saying. “They even ensured we would win the award,” he said, adding that the organisation awarded three competitors the same year by creating different categories.
The selection practice remains in clear violation of the section 10 of the Competition Act 2010, which states: “The deceptive marketing practices shall be deemed to have been resorted to or continued if an Undertaking resorts to: (a) The distribution of false or misleading information that is capable of harming the business interests of another undertaking; (b) The distribution of false or misleading information to consumers, including the distribution of information lacking a reasonable basis, related to the price, character, method or place of production, properties, suitability for use, or quality of goods.”
For instance SC Johnson and Sons’ Baygon – which won the said award in the category of insect killer aerosol in 2010 – best explains how the Brands Award violated the Act. According to AC Nielsen – a globally recognised marketing research firm – Reckitt Benckiser’s Mortein has an overall market value share of 39.7% in Pakistan against 5.7% of their rival Baygon — which by no means is a close competition.
The Competition Commission – the country’s top consumer watch-dog – also trusted the stats by AC Neilson and issued a show cause notice to Baygon’s manufacturer, directing them to remove Brand of the Year Award from their ad campaign — which, according to the commission, was incorrect and misleading.
“Nielsen has its own working and we have our own. We don’t work in an ideal environment so there could be differences in survey results,” said Shakil Khan, group director operations and head of research and publications at Exhibitor Group of Companies. “If we are able to shortlist 170 out of 180 brands correctly, we are satisfied,” Khan said. “As we move forward, we will be more accurate,” he added.
Responding to a question about the English newspapers category, Khan said The News International was given the award because Dawn did not participate. For its latest edition, the Brands Foundation has nominated Express Media Group’s subsidiaries Express News, Daily Express (Urdu), The Express Tribune and Javed Chaudhary’s talk show Kal Tak in their respective categories.
Five products of Pepsi – soft drink (cola), drinking water, potato chips, extruded snacks and soft drink (citrus) – won the title in 2010. It was in competition with Coca-Cola, according to Khan, but the latter did not participate.
Asked if Nestle could be a close contender in drinking water category, he said, Nestle did not participate either.
Published in The Express Tribune, July 6th, 2012.
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