The anti-trust watchdog on Friday took a lenient view and reprimanded paint companies for concealing exact price of the paint, providing misleading information to consumers and not disclosing the cost of coupon added to the consumer price.
The Competition Commission of Pakistan (CCP) passed an order against 16 paint companies for violating Section 10 of the Competition Act 2010 that deals with deceptive marketing practices.
The undertakings have been reprimanded and asked to ensure more responsible behaviour in future with respect to marketing of their products and have been directed to file a compliance report on implementation of the directives by March 30, said an official handout.
CCP warned that continuous violation and non-adherence to the directives by any of the companies would entail penal action.
The order was issued by a CCP bench comprising Rahat Kaunain Hassan, Chairperson of CCP, Dr Shahzad Ansar and Vaddiya Khalil.
CCP acted on a concern raised by the Consumer Association of Pakistan that paint manufacturers were hiding tokens or redeemable coupons in paint packs without adequate disclosure, leaving the consumers largely unaware of this practice.
The probe and hearings revealed that this was an industry practice going on for the past many years. The value of tokens ranges from approximately Rs50 to Rs500 varying with the size of the paint pack and depending on the brand.
“The companies have agreed to start disclosing the presence of token in paint packs to the consumer and have shown willingness to comply with the directives of CCP,” said the CCP.
Notices had been issued to ICI Pakistan, Nippon Paint Pakistan, Kansai Paint, Berger Paints Pakistan Ltd, Brighto Paints, Diamond Paint Industries, Mansoor Paint Industries, UP Paint Industries, Nelson Paint Industries, Chawla Chemical and Metal Industries, Brolac Paints, Karss Paints Industries, Allied Paint Industries, Sika Paint Industries, Rafiq Polymer Industries and Black Horse Paints.
The companies have been directed to modify all advertisements, promotional material or instruction manuals pertaining to the paints whether electronic or printed.
It has been observed that the painter after purchasing the paint pack, obtains the token that is concealed at the bottom of the paint pack, and then en cashes it from a shop or company outlet while the end consumer, who bears the price of the paint pack, does not have any knowledge of this.
CCP has asked the undertakings to ensure that disclosure with respect to the token on the paint pack should be made by using bright and conspicuous colours distinct from the colour of the packaging and should be in clear, bold and legible size for the consumer.
Published in The Express Tribune, January 14th, 2012.
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