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ISLAMABAD: The Competition Commission of Pakistan (CCP) has decided to initiate proceedings against a dairy company for committing deceptive marketing practices by providing false and misleading information to the consumers about milk products to the general public.

According to the inquiry report of the CCP, M/s Parents Pakistan (SMC-Private) Limited (the “Complainant”), filed a complaint against the dairy company with the CCP (the “Commission”) for alleged violation of section 10 of the Competition Act, 2010 (the “Act”), about deceptive marketing practices.

It has been alleged in the complaint that the company has distributed information in the form of its product packaging, labeling, television commercials, advertisements, and statements made by it on its official website and social media platforms in respect of three of its products, which are not backed by reliable scientific data and is misleading consumers into believing that the product is milk and, as such, constitutes deceptive marketing. After attaining the preliminary facts, the Competent Authority initiated an enquiry in accordance with subsection (2) of Section 37 of the Act by appointing Enquiry Committee to conclude the enquiry.

The Enquiry Committee was directed to conduct the enquiry on the issues raised in the complaint and to submit the enquiry report by giving its findings and recommendations. The CCP concluded that as regards the effect of anti-competitive behaviour spilling over territorial limits of other provinces is concerned, the packaging and other promotional materials of the company was circulated via nationwide TV Commercials and Facebook page.

Hence the scope of the TVC and Facebook was not restricted to a particular area or province, in fact, it is available to ordinary consumers around the country.

The advertisement by the company has a nationwide effect because the ordinary consumers can excess the TVC’s via Television and Facebook page.

Therefore, keeping in view the overall marketing campaign of the Respondent regarding the products along with the technicality of the issue concerning the various categories of milk and dairy based/milk products, the Enquiry Committee is of the view that the general public has been misled by the company believing that this product is milk.

Additionally, the company has also portrayed these products to be a better alternative of milk without a reasonable basis as the deliberation on efficacy and necessity of these products compared to natural/regular/loose milk is still being studied and under debate. Whereas till a final opinion is endorsed by all relevant expert national and international organisations, to make any such claims which imply the superiority of these formulae over milk for a child’s health appears to be unsubstantiated and hence, false and misleading.

As a result, the Respondent has been found involved in distribution of false and misleading information to the consumers that lacks reasonable basis related to character, method of production, properties and quality of goods which, prima facie, constitutes violation of section 10 (1) in general and section 10 (2) (b) in particular.

Furthermore, the Respondent is also found involved in false and misleading comparison of goods in the process of advertising in, prima facie, violation of section 10(I) in general and section 10(2)(c) in particular.

In conclusion, deceptive marketing practices as discussed in this enquiry report have a direct impact on the public at large as well as the principles of fair competition.

Copyright Business Recorder, 2021