CCP fines Unilever, Friesland Campina Rs75m for misleading ads

December 20, 2024 (MLN): The Competition Commission of Pakistan (CCP) has imposed a Rs75 million penalty on two manufacturers of frozen desserts, Unilever Pakistan and Friesland Campina Engro, for misleading consumers by advertising their products as “ice cream.”

This action follows a complaint by Pakistan Fruit Juice Company (Private) Limited, makers of “Hico” ice cream, who alleged deceptive marketing tactics through TV ads and social media campaigns.

After a formal enquiry, CCP issued show-cause notices to both companies, manufacturers of “Walls” and “Omore” frozen desserts, for violating advertising standards and misleading consumers.

The CCP bench, comprising Members Mr. Salman Amin and Mr. 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 Rs20 million was also imposed on Unilever Pakistan for conducting and disseminating false comparisons of their products as healthier 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 the distribution of false and misleading information to the consumers, prohibited under 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.

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