Background of the Case:

Concerns were raised by a Mr. Abu Ahmed through email that some undertakings were marketing dairy drinks or dairy liquids and liquid / powdered tea whiteners as milk or as milk substitutes, while using various proportions of milk extracts / reconstitutes in their products, which could not be considered, marketed, advertised and sold as milk and / or as milk substitutes. The involved companies were (i) Engro Foods Limited (EFL), (ii) Noon Pakistan Limited (NPL) and (iii) Shakarganj Foods Products Limited (SFP).

The subsequent enquiry found that the these companies were prima facie deceiving consumers by marketing and selling tea whiteners and dairy drinks including SFP's product 'Qudrat' (liquid tea whitener), NPL's product 'Dairy Rozana' (dairy drink) and EFL's product 'Dairy Omung' (dairy drink) as milk. Proceedings were initiated under Section 30 of the Act.

Order:

The Commission found that the relevant products of EFL, NPL, and SFP all misled the ordinary consumers into believing they were consuming milk and constituted deceptive marketing practices which was in violation of Section 10 of the Competition Act.

The also Commission also held that EFL in its marketing campaign for its product ‘Dairy Omung’ , particularly the television commercial, gave the net impression that ‘Omung’ is milk, and not a dairy drink, while the company’s website termed ‘Omung’ as an alternate to loose milk, thereby deceiving the unsuspecting consumer. The order further noted that the packaging and labelling of NPL’s product ‘Dairy Rozana’ gave a general net impression that the product is milk, not a dairy drink thus deceiving the consumers about the product.

Regarding SFPL’s product ‘Qudrat’, the order found that the labelling on the packaging was deceptive in the absence of a proper and sufficient disclosure about the product. The Commission stated that when material information pertaining to products or services was inaccurate or incomplete, it was likely to mislead consumers and affect competitors, in violation of Section 10 of the Competition Act.

The Commission imposed fines of PKR 62.29 million on EFL, PKR 2 Million on NPL, and PKR 500,000 on SFP for the violation of Section 10 of the Competition Act.

CURRENT STATUS:

Engro, Shakarganj and Noon Pakistan filed appeal before CAT challenging the Order.