Daily Times

KARACHI: The Competition Commission of Pakistan (CCP) has imposed penalties on Shakarganj Foods Products Limited (SFP), Noon Pakistan Limited (NPL) and Engro Foods Limited (EFL) for advertising tea whiteners as milk.

In this regard, the CCP has issued order imposing penalties on the aforementioned companies for deceiving consumers by selling tea whiteners as milk since the CCP’s inquiry found that SFP’s product ‘Qudrat’ (liquid tea whitener), NPL’s product ‘Dairy Rozana’ (dairy drink) and EFL’s product ‘Dairy Omung’ (dairy drink) are not milk.

The CCP’s order states that EFL is directed to pay an amount equal to 0.03% of its last turnover (accounting year 2015) for each of the four violations, for a total of Rs 62.39 million as penalty. NPL which has been acquired by Fauji Fertilser Limited (FFL) now is directed to pay Rs 2 million as penalty and similarly SFP is directed to pay Rs 500,000 as penalty. “The penalties have been imposed on each undertaking keeping in view the severity of the violation and its impact on competition and consumers in the market in general”.

The CCP said that EFL made the most serious of infraction amongst all companies, specifically making substantial omissions, not disclosing that its product is a dairy drink and giving the impression that its dairy drink is a substitute of milk. The infractions are relatively serious since the deceptive marketing was not just through its product’s packaging but also through a television commercial which reaches a wide audience.

According to the CCP”s Enquiry Report, EFL’s product ‘Dairy Omung’ and associated marketing campaign as a whole gives a firm impression that Omung is milk and not a dairy drink. Moreover, the disclosure on the website of the EFL also reveals that Dairy Omung is an alternative to loose milk. Thus the advertisement of the EFL is not only deceiving the consumer about the character, properties, suitability for use and quality of their product but is also capable of harming the business interest of other undertakings and, prima facie, violates Section 10(1) in terms of Section lO(2)(a) & (b) of the Act. The Undertaking at the same time is also involved in the wrong comparison of their Dairy Drink with loose milk.

“Therefore, its violations have attracted the highest penalty in relative terms, although nominally it still constitutes a very small percentage of its annual turnover. NPL had also omitted to fully disclose that its product was a dairy drink but its infractions were limited to its packaging. Moreover, NPL has ceased production of this product and hence the level of penalty imposed is relatively lower. Similarly, SFPL’s deceptive practices are limited to its packaging only”, it added.

Furthermore, SFPL is already partially disclosing that its product was a tea whitener on the sides and presented a changed packaging displaying tea whitener on all four sides and therefore it has, relatively, attracted the lowest penalty. The authority has warned all three companies that that any further violation in this regard and deviation from their commitments and the conditions laid out above may attract severe penalties under the Act.