CCP slaps Rs 170 million on Unilever’s products for deceptive marketing

The Competition Commission of Pakistan (CCP) has imposed penalties of Rs 75 million each on two manufacturers of frozen desserts for misleading consumers by falsely advertising their products as “ice cream.”

CCP initiated these proceedings on a complaint filed by M/s Pakistan Fruit Juice Company (Private) Limited, the manufacturers of “Hico” ice cream, alleging about two undertakings engaged in deceptive marketing by portraying their “frozen desserts” as ice cream through televised advertisements and social media campaigns.

The Commission directed a formal enquiry into the matter and later issued show cause notices to M/s Unilever Pakistan and M/s Friesland Campina Engro, manufacturers and distributors of frozen desserts under the brand names of “Walls” and “Omore,” respectively.

The CCP bench, comprising the Members Salman Amin and Saeed Ahmed Nawaz conducted these hearings. The bench while imposing the penalty in its order, inter-alia referred to the Pakistan Standards and Quality Control Authority (PSQCA) PS 969-2010 and the Punjab Pure Food Regulations 2018, which define “frozen dessert” and “ice cream” as two distinct products. Notably as per the standards, “ice cream” is made from milk, cream, or other dairy products, while “frozen desserts” are prepared from a pasteurized mix consisting of a combination of milk, milk products, and edible vegetable oils.

Additionally, a penalty of Rs 20 million was also imposed on M/s Unilever Pakistan for conducting and disseminating false comparisons of their products as heathier to the dairy ice cream in its advertisements, which constitutes a violation of Section 10(2)(c) of the Competition Act.

The order has also referenced international jurisdictions, including the USA, Australia, and India, wherein food quality standards authorities have specified the term “ice cream” exclusively for dairy-based products. Noticeably, the Food and Drug Administration (FDA) in USA had also penalized an undertaking for marketing and misbranding its frozen dessert products by labeling them as “ice cream.”

CCP in the order has also directed the undertakings to desist from presenting frozen desserts as ice cream in their advertisements, as it leads to distribution of false and misleading information to the consumers, prohibited pursuant to section 10 of the Competition Act. Both companies are thus required to remove such advertisements from digital platforms also and make adequate disclosure about their products.

A compliance report in this regard is to be submitted to the CCP within 30 days of the Order.

CCP under the law is mandated to ensure open competition in all spheres of commercial and economic activities and to protect consumers from any anticompetitive behaviours, including any deceptive marketing practices.