The Competition Commission of Pakistan (CCP) has issued Show Cause Notices to sixteen paint companies for prima facie, violation of Section 10 of the Competition Act, 2010 pertaining to deceptive marketing practices. The companies that have been issued the show cause notices are the following: M/s ICI Pakistan (Ltd), M/s Nippon Paint Pakistan (Pvt) (Ltd), M/s Kansai Paint (Pvt)(Ltd), M/s Berger Paints Pakistan (Ltd), M/s Brighto Paints (Pvt)(Ltd), M/s Diamond Paint Industries(Pvt)(Ltd), M/s Mansoor Paint Industries, M/s U.P Paint Industries (Pvt) Ltd, M/s Nelson Paint Industries, M/s Chawla Chemical and Metal Industries (Pvt) Ltd, M/s Brolac Paints (Pvt) (Ltd), Karss Paints Industries (Pvt)(Ltd), M/s Allied Paint Industries, M/s Sika Paint Industries (Pvt) (Ltd), M/s Rafiq Polymer Industries and M/s Black Horse Paints. These SCNs were issued. The show cause notices were issued after it was brought to the notice of CCP during advocacy sessions held with the Consumer Association of Pakistan, that paint manufacturers were hiding tokens or redeemable coupons in paint packs. Upon preliminary investigation of the matter, the CCP found that the practice of putting tokens is targeted as a monetary incentive to the painter, ranging from approximately Rs. 20 – Rs. 500 varying with the size of the paint pack and depending on the brand. Typically, the painter after purchasing the paint pack, obtains the token which is concealed at the bottom of the paint pack. The painter then en-cashes the token from a shop or company outlet while the end consumer bears the price of the paint pack without having any information in this regard. While many of the undertakings maintain that it is intended for the benefit of the end consumer. This non-disclosure of important information amounts to the distribution of misleading information as to the price of the paint packs. Based on these preliminary findings, in its show cause notices the CCP has stated that the paint companies were misleading end consumers related to the price of the paint in terms of clause (b) sub-section (2) of Section 10 of the Act. The aforementioned paint companies have been asked to submit their written arguments within fourteen days and to appear before the Commission on August 25, 2011. It is the responsibility and obligation of the CCP under the Act to ensure free competition in all spheres of commercial and economic activity and to protect consumers from anti-competitive behavior and deceptive marketing practices. Since some of the undertakings gave the assurance that they will start disclosing the presence of the token, owing to CCP’s compliance oriented and conciliatory approach a lenient view will be taken towards them.
The Competition Commission of Pakistan (CCP) has issued Show Cause Notices to sixteen paint companies for prima facie, violation of Section 10 of the Competition Act, 2010 pertaining to deceptive marketing practices.
The companies that have been issued the show cause notices are the following: M/s ICI Pakistan (Ltd), M/s Nippon Paint Pakistan (Pvt) (Ltd), M/s Kansai Paint (Pvt)(Ltd), M/s Berger Paints Pakistan (Ltd), M/s Brighto Paints (Pvt)(Ltd), M/s Diamond Paint Industries(Pvt)(Ltd), M/s Mansoor Paint Industries, M/s U.P Paint Industries (Pvt) Ltd, M/s Nelson Paint Industries, M/s Chawla Chemical and Metal Industries (Pvt) Ltd, M/s Brolac Paints (Pvt) (Ltd), Karss Paints Industries (Pvt)(Ltd), M/s Allied Paint Industries, M/s Sika Paint Industries (Pvt) (Ltd), M/s Rafiq Polymer Industries and M/s Black Horse Paints. These SCNs were issued.
The show cause notices were issued after it was brought to the notice of CCP during advocacy sessions held with the Consumer Association of Pakistan, that paint manufacturers were hiding tokens or redeemable coupons in paint packs. Upon preliminary investigation of the matter, the CCP found that the practice of putting tokens is targeted as a monetary incentive to the painter, ranging from approximately Rs. 20 – Rs. 500 varying with the size of the paint pack and depending on the brand. Typically, the painter after purchasing the paint pack, obtains the token which is concealed at the bottom of the paint pack. The painter then en-cashes the token from a shop or company outlet while the end consumer bears the price of the paint pack without having any information in this regard. While many of the undertakings maintain that it is intended for the benefit of the end consumer.
This non-disclosure of important information amounts to the distribution of misleading information as to the price of the paint packs. Based on these preliminary findings, in its show cause notices the CCP has stated that the paint companies were misleading end consumers related to the price of the paint in terms of clause (b) sub-section (2) of Section 10 of the Act. The aforementioned paint companies have been asked to submit their written arguments within fourteen days and to appear before the Commission on August 25, 2011.
It is the responsibility and obligation of the CCP under the Act to ensure free competition in all spheres of commercial and economic activity and to protect consumers from anti-competitive behavior and deceptive marketing practices. Since some of the undertakings gave the assurance that they will start disclosing the presence of the token, owing to CCP’s compliance oriented and conciliatory approach a lenient view will be taken towards them.
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