The Competition Commission of Pakistan (CCP) has declared that a dairy milk product of a multinational food company is in line with the applicable food standards and contains nutritional qualities which may be beneficial for a child's wellbeing and fulfils relevant food standard requirements.
In this regard, the CCP has issued an inquiry report on a complaint filed by a multinational food company (Complainant) against a private limited company (Respondent) which is competing in the milk products market.
The company (Complainant) has filed a complaint before the Commission u/s 37(2) of the Competition Act, 2010 (the "Act") against Respondent for alleged violation of Section 10 of the Act which prohibits deceptive marketing practices.
The CCP has endorsed the viewpoint of the multinational company that all products of the Complainant fully meet all local and international regulatory and food safety requirements, being completely free of contaminants/ adulterants as well as the applicable labeling requirements. The Complainant has put strict quality control procedures in place throughout its manufacturing process, testing everything from raw materials to finished products as sold to the end consumers.
In the report, the CCP has ruled that the deceptive marketing practices in the diary sector have a direct impact on the public at large as well as the principles of fair competition. It is, therefore, in the interest of the general public and other players in the market that the undertakings should be curtailed from advertising their products/services in a deceptive manner and be encouraged to resort to the advertising practices that are transparent and give consumers true and correct information. Therefore, prima facie violations under the Act in terms of the findings of this enquiry report warrant initiation of proceedings against private limited company (Respondent) under Section 30 of the Competition Act.
Finally, as the Respondent company has been prima facie found engaged in deceptive marketing practices, it is important to note that such conduct can create a false impression regarding the Complainant's dairy product, especially in reference to the Respondent's new product. Resultantly, such behavior is also capable of affecting the decision making process of the consumers which is further capable of giving an unfair advantage to the Respondent, while harming business interest of the Complainant. Therefore, the Respondent has also been Page 53 of 53 found in prima facie violation of Section 10 of the Act, read with sub-Sections 10(2)(a) of the Act in particular.
The CCP inquiry report stated that the information makes it very clear that adding vegetable oil to this category of dairy based product is permissible under the law. Resultantly, to show that the Complainant is doing something wrong or illegal by adding vegetable oil to its products amounts to distribution of false and misleading information to consumers without a reasonable basis related to characteristics, properties, suitability for use and quality of the Complainant's Product Range by the Respondent in, prima facie, violation of Section 10(2)(b) of the Act.
Subsequently, it is stated that keeping in view the various documents submitted by the Complainant, including several reports drafted by PFA and other scientific laboratories, it can be concluded that its product is in line with the applicable food standards. As per these documents, including the reports submitted to the Supreme Court, the said dairy product contains all the nutrients according to the label printed on its packaging.
Therefore, it can be concluded that the dairy product does contain nutritional qualities which may be beneficial for a child's wellbeing and fulfils relevant food standard requirements. Whereas to infer otherwise, that too in such a disparaging manner, which suggests that product have absolutely no nutritional value and that it is merely a combination of oil and whitener amounts to distribution of false and misleading information to consumers without a reasonable basis related to characteristics, properties, suitability for use and quality of the Complainant's product range by the Respondent in, prima facie, violation of Section 10(2)(b) of the Act.
Copyright Business Recorder, 2019