CCP fines three milk manufacturing companies

Says entities violating Section 10 of the Competition Act, 2010

ISLAMABAD: The antitrust watchdog on Monday imposed a fine on three milk manufacturing companies including Engro Foods Limited for “deceptive marketing practices which were aimed at deceiving consumers”.

The Competition Commission of Pakistan (CCP) has passed an order imposing fines of Rs62.29 million on Engro Foods Limited, Rs2 million on Noon Pakistan Limited (NPL) and Rs500,000 on Shakarganj Foods Products Limited (SFP) for violating Section 10 of the Competition Act, 2010, according to an official handout.

The CCP’s bench comprising of chairperson Vadiyya Khalil, members Dr Shahzad Ansar and Ikramul Haq Qureshi passed the order. The order disposes off the show cause notices issued to these companies after an inquiry conducted by CCP found that they 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 Engro Foods’ ‘Dairy Omung’ (dairy drink) as milk.

The order found that Engro Foods 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.

The 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, said the CCP.

Published in The Express Tribune, January 24^th, 2017.

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