Deceptive marketing practices: CCP imposes Rs170m penalties on two frozen dessert makers

ISLAMABAD: The Competition Commission of Pakistan (CCP) has imposed significant penalties on two leading frozen dessert manufacturers for deceptive marketing practices.

The penalties, totaling Rs 170 million, were imposed on a leading multinational company, the manufacturer of “Walls,” and another company, the producer of “Omore.” Both companies were fined Rs 75 million each for misleading consumers by falsely advertising their frozen desserts as “ice cream.” An additional penalty of Rs 20 million was imposed on the said multinational company for running false comparisons in its advertisements, portraying its products as healthier than dairy-based ice creams.

The CCP’s action followed a complaint lodged by Pakistan Fruit Juice Company (Private) Limited, the makers of “Hico” ice cream. The complaint accused the companies of engaging in deceptive marketing practices by presenting their frozen dessert products as ice cream in televised advertisements and social media campaigns. These practices misled consumers about the nature of the products, creating unfair competition in the market.

In its order, the CCP referred to standards established by the Pakistan Standards and Quality Control Authority (PSQCA) PS 969-2010 and the Punjab Pure Food Regulations 2018. According to these regulations, ice cream must be made from milk, cream, or other dairy products, while frozen desserts are produced using a combination of milk, milk products, and edible vegetable oils. This distinction between the two categories formed the basis for the CCP’s ruling.

The order also drew on examples from international jurisdictions, including the USA, Australia, and India, where food regulatory authorities strictly regulate the labeling of ice cream. The CCP specifically referenced a case from the United States, where the Food and Drug Administration (FDA) penalized a company for misbranding frozen desserts as ice cream, citing it as an instance of adulteration and deceptive marketing.

As part of its directives, the CCP has ordered both companies to immediately cease deceptive marketing practices and refrain from labeling frozen desserts as ice cream in all forms of advertising. Both companies have been instructed to revise their marketing materials, ensuring that the true nature of their products is clearly disclosed with bold disclaimers. They must also remove misleading advertisements from all digital platforms and submit a compliance report to the CCP within 30 days of the order. Non-compliance will result in a daily penalty of Rs 100,000.

The penalties reflect the CCP’s commitment to deterring anti-competitive behavior and safeguarding consumer rights. By addressing these violations, the CCP aims to protect consumers, particularly children, who are the primary consumers of such products. This decision serves as a reminder to businesses to adhere to ethical marketing practices and maintain transparency in their advertising.

For detailed information, the CCP’s full order is accessible on its official website. This case highlights the importance of regulatory oversight in ensuring fair competition and protecting consumers from misleading marketing strategies in Pakistan’s food industry.

Copyright Business Recorder, 2024