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Petitioner: M/S Pakistan Fruit Juice Company Private Limited Regarding Deceptive Marketing Practices VS Respondent: In The Matter of Show-Cause Notices Issued To M/S. Unilever Pakistan Limited and M/S Friesland Campina Engro Pakistan Limited
Court Name: Competition Commission of Pakistan Judge(s): Saeed Ahmad Nawaz, Salman Amin Title:M/S Pakistan Fruit Juice Company Private Limited Regarding Deceptive
Marketing Practices vs In The Matter of Show-Cause Notices Issued To M/S. Unilever Pakistan Limited and M/S Friesland Campina Engro Pakistan Limited Case No.: File No.427/Pakistan Fruit Juices/OFT/CCP/2022/454 Date of Judgment:2024-12-18 Reported As: 2025 CLD 651 Result: Complaint allowed Judgment
ORDER This order shall dispose of the proceedings arising out of Show Cause Notice Nos.14/2022 and 15/2022 both dated 20.07.2022 (hereinafter referred to as the SCNs) issued to M/s Unilever Pakistan Limited (hereinafter referred to as the Respondent No.1) and M/s Friesland Campina Engro Pakistan Limited (hereinafter referred to as the Respondent No.2) respectively, for prima facie violation of Section 10 of the Competition Act, 2010 (hereinafter referred to as the Act). 2. M/s Pakistan Fruit Juice Company (Private) Limited (hereinafter referred to as the Complainant) has alleged in its complaint that the Respondents were engaged in the deceptive marketing practices by promoting/depicting their products i.e. frozen desserts as ice creams through their televised advertisements, social media campaigns, products' packaging and other marketing materials. It also alleged that the Respondents tried to create a false identity of their products as ice creams that amounts to dissemination of false and misleading information under section 10 of the Act, and caused harm not only to the consumers but also to the business interests of the Complainant. FACTUAL BACKGROUND The Complaint: 3. The Complainant is a private limited company, engaged in the business of manufacturing and marketing ice cream through its brand "Hico Ice Cream". The Respondents No.1 is a public unlisted company whereas the Respondent No.2 is a public listed company. Both Respondents are, inter alia, involved in the business of manufacturing, marketing, distribution and sale of frozen desserts under the name and style of their brands "Walls" and "Omore" respectively (hereinafter referred to as the
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Products). The Complainant lodged its complaint against the above referred Respondents on 21.02.2022. 4. According to the Complainant, the ice cream industry comprises of two categories of products namely, "ice cream" and "frozen dessert", and both the products are fundamentally different in nature, nutritional composition and cost structure. It was asserted that the "ice cream" is essentially made from dairy fats (e.g. milk, cream, butter etc.), whereas the "frozen dessert" is manufactured from vegetable fats (e.g. palm oil etc.). Furthermore, for a product to be considered as "ice cream", it must contain at least 10% milk fat and 10.1% non-milk fat solids. The Complainant assailed the following claims and deceptive marketing practices of the Respondents: Respondent No. 1: i. "'Thand mein ice cream"; "Creamy vanilla ice cream"; "Hey, yaar tu ice cream ho ke kaanp raha he"; iv. "Ice cream" word used in advertisements for frozen dessert; V. "Itna creamy"; vi. Milk splashes in advertisements; and vii. "Wall's Creamy Delights". Respondent No.2: i. "Ice cream" word used in advertisements; Advertisements show milk splashes; and "Creamy kulfa" phrase used in advertisements. 5. The Complainant further stated that Punjab Pure Food Rules, 2011 and Punjab Pure Food Regulations, 2018 (hereinafter collectively referred to as the Punjab Rules and Regulations) were the relevant by- laws which defined differences between the two products. Moreover, Punjab Food Authority had documented the differences in its consumer advisory, publicising that "frozen dessert" was not a substitute of "ice cream" and urged the parents to prefer "ice cream" over "frozen desserts" for their children. The Complainant further alleged that the Respondents had marketed, branded, promoted and sold their products i.e. "frozen desserts" under the guise of "ice cream". 6. The Complainant asserted that Punjab Rules and Regulations required manufacturers of "frozen dessert" to include a phrase i.e. 'frozen dessert contains edible vegetable oil' on the packaging, however, the Respondents actually printed this statement in a very small font, which was not an adequate disclosure of material information to the consumers. Therefore, the alleged advertisement and labels/packaging of the Respondents' products neither complied with the requirements of relevant food laws nor the disclosure parameters as set forth by the Competition Commission of Pakistan (hereinafter referred to as the Commission) in case of Reckitt Benckiser Pakistan Limited, reported as 2021 CLD 484. In absence thereof, the consumers were led to believe that the Respondents' products were "ice cream", hence, the same was misleading and deceptive within the meanings of section 10, subsection (a) and (b) of the Act. 7. To the extent of the Respondent No. 1, the Complainant also alleged that it had even engaged in false and misleading comparison of goods on its social media page by comparing the "frozen dessert" with "ice cream", especially claiming that the "frozen dessert" was a healthier choice as compared to the "ice cream". Therefore., the claim of the Respondent No. 1 attracted the provisions of Section 10(2)(c) of the Act being a false and misleading comparison and thus prohibited under the Act. 8. In order to substantiate its allegations, the Complainant submitted documentary evidence with its complaint in the form of TV commercials, copies of advertisements on social media pages, marketing materials on e-platforms, and information available on the Respondents' official websites. Enquiry Report and Show-Cause Notices: 9. Upon receipt of the Complaint dated 21.02.2022, the Commission considered the same and after verifying its veracity as required under section 37(2) of the Act, constituted an Enquiry Committee (hereinafter referred to as the EC) on 02.03.2022, to conduct a fact-finding exercise in the matter. The
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EC finalized the Enquiry Report (hereinafter referred to as the ER) on 29.06.2022 and concluded in paragraphs 7.1 to 7.4 that, prima facie, the Respondent No.1, had violated sections 10(2)(a), 10(2)(b) and 10(2)(c) of the Act, whereas. The Respondent No.2 had violated sections 10(2)(a) and 10(2)(b) of the Act. The EC proposed to initiate proceedings against the Respondents under Section 30 of the Act. 10. The Commission duly considered the findings and recommendations of the ER, and decided on 13.07.2022 to initiate proceedings under section 30 of the Act and accordingly issued SCNs dated 20.07.2022 to the Respondents requiring them to explain their respective positions and avail the opportunity of being heard in the open hearings. The Complainant as well as the Respondents submitted their written replies to the SCNs and appeared before the Commission in the hearings to put forth their point of view. Submissions of the Respondents to the SCNs are summarized hereunder: SUBMISSIONS OF THE RESPONDENTS The reply of the Respondent No. I to the SCN and submissions made by khawaja Aizaz Ahsan, Advocate High Court, the learned counsel for Respondent No.1 during the hearings before the Bench are summarised as follows: 11. That the food standards framed by Pakistan Standards and Quality Control Authority (hereinafter referred to as PSQCA) are the only federal food standards applicable all over Pakistan, which must be given due recognition. Conversely, all standards framed under the Punjab Pure Food Ordinance, 1960, Punjab Food Authority Act, 2011, Punjab Pure Food Rules, 2011 or Punjab Pure Food Regulations, 2018 are provincial standards and do not override the federal standards. 12. That the Respondent's products fall within the ambit of PSQCA standards for ice cream i.e. PS 969- 2010, which are applicable to both the "frozen desserts" as well as the "dairy ice cream". Both the "frozen desserts" and the "dairy ice cream" are product categories under the umbrella-heading of "ice cream". Since the term "ice cream" is used as a broad category for both the products, therefore, the Respondent is legally not forbidden from using this term. The Respondent's marketing practices are, hence, in accord with the prevailing food laws. However, without any legal basis, the Complainant is trying to create a distinction between "frozen dessert" and "ice cream", which is not a valid stance. 13. That PSQCA has also notified regulations for packaging and labelling of ice cream products, therefore, PSQCA' s packaging regulations are applicable instead of the regulations framed by the Punjab Food Authority. Despite non-applicability of the provincial standards for packaging and labelling, the Respondent No.1 has already disclosed the nature of the product on its packaging, both in Urdu and English. Every product wrapper contains the information that the product is a "frozen dessert", hence, the Respondent has fulfilled the disclosure requirements of law. 14. That the Respondent No.1 is not even under any obligation to disclose or to make a disclosure because the "frozen dessert" is a sub-category of "ice cream" and, therefore, the Respondent No.1 has not made any claim that needs to be qualified through publication of a disclosure. In absence of any claim, the concept of disclosure is not attracted. That despite the aforesaid factual position, the Respondent No.1 has gone a step beyond the bare minimum requirements of law and advertises on front part of the product packaging that the product concerned is "frozen dessert", so as to make the consumers aware of the nature of the product. 15. That the alleged post on the social media page is not a marketing strategy. Instead, it is a response to a consumer advisory posted by the Punjab Food Authority on its social media page, which accorded preference to one category of "ice cream". Since the Authority specifically used the Respondent's name in the post, therefore, feeling aggrieved, the Respondent considered it appropriate to respond to the same by issuing a clarification on its Facebook wall regarding the difference between "frozen dessert" and "dairy ice cream". Based on nutritional compositions, its "frozen dessert" contains zero cholesterol, lesser calories and healthier fats, therefore, it is a healthier choice as compared to "dairy ice cream". 16. That it has not made any affirmative claim, therefore, neither the concept of disclosure is attracted nor is the Respondent under any obligation to print a disclosure. Even if it is required, the text "frozen dessert" is already printed on its product packaging in conspicuous manner proportionate to the product name on the wrapper, hence, its placement and prominence is such that a reasonable
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consumer is able to identify the product category. Further, that the findings of the ER on the requirements of disclosure are misplaced. The reply of the Respondent No. 2 to the SCN and arguments presented by Ms. Zainab Janjua, Advocate High Court the learned counsel for Respondent No.2 during the hearings before the Bench are summarised hereunder: 17. That the arguments of the Respondent No.1 with respect to applicability of PSQCA standards and disclosure requirements are equally applicable in case of the Respondent No.2. However, in reply to the Show-Cause Notice, the Respondent No.2 clarified that the Facebook posts referred to in Para 6.51 of the ER dated back to the year 2015, and that too, were posted by the Respondent No.2 inadvertently and erroneously without any intention to mislead the consumers. The Respondent No.2 has never reposted or re-advertised the said Facebook posts. This negates the impression created by the ER that the influence from the alleged advertisement grows as it continues to be projected to the consumers. Neither the alleged Facebook post is easily accessible by potential consumers nor viewed or liked by too many consumers, hence, not likely to mislead or affect the buying decision of the consumers. 18. That the ER incorrectly refers to the information on official website of the Respondent No.2 as advertisement. The information on the website is actually in relation to the company's overview and it traces history of the Respondent's business, hence, it is for information purposes only and not for the purpose of an advertisement. Even otherwise, this information on the Respondent's website is factually correct and does not constitute misleading information. The information communicates the fact that Respondent No.2 started business as ice-cream manufacturer and gradually expanded its range of products to frozen desserts. It has also obtained license to manufacture and sell ice cream under the brand name of "Omore". 19. That the ER incorrectly finds that the sale of "frozen desserts" on E-platforms under the category of "ice cream" amounts to dissemination of misleading information. The Respondent No.2 is not to be held liable for the alleged deceptive marketing practices that are carried out by third-party resellers, who are not even authorized dealers of the Respondent No.2. If any E-platforms, such as Aywadeal.com, Ondoorstore.com and Airlift, engages in deceptive marketing practices in any manner whatsoever, it does not have any connection or business relationship with the Respondent No.2. The said E-platforms are independent and are not under the control of the Respondent No.2. Even otherwise, section 10 of the Act does not obligate the Respondent No.2 to ensure that the retailers, wholesalers or any other actors in the supply chain do not engage in deceptive marketing practices. ANALYSIS OF THE MATTER 20. Arguments of the parties heard and record perused. In order to decide the instant complaint, the determination of following issues is necessary: A. Whether the Respondents have violated Section 10(2)(b) of the Act by diseminating false and misleading information to the consumers? and B. Whether the Respondent No.1 has violated Section 10(2)(c) of the Act by carrying out false and misleading comparison of goods in the course of advertisement? Issue A: Whether the Respondents have violated Section 10(2)(b) of the Act by disseminating false and misleading information to the consumers? 21. In order to better comprehend the Complainant's concerns as well as the response thereof by the Respondents about the alleged violation of section 10(2)(n), it is necessary to be cognizant of the background of the standards which are applicable to the "ice cream" and "frozen dessert" products. The Punjab Pure Food Rules, 2011 and Punjab Pure Food Regulations, 2018 classified "ice cream" and "frozen desserts" into two separate categories, former being made of dairy fats whereas later being made from vegetable fats. Due to this factual difference in ingredients of both the products, the Complainant asserted that "frozen dessert" products were not "ice cream" and over a substantial period of time a general perception has been developed among the consumers that "ice cream" always meant "dairy ice cream" and not the "frozen dessert".
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22. On the other hand, the Respondents relied upon the Pakistan Standards Quality Control Authority (PSQCA) Standard i.e. PS 969-2010 and claimed that "frozen dessert" and "dairy ice cream" both were treated therein as sub-categories of "ice cream". Hence, the Respondents claimed that there was nothing wrong in calling "frozen dessert" as "ice cream" for being its sub-category. In order to resolve this matter first, it is necessary to review both the provincial and federal standards as applicable to the "ice cream" and "frozen dessert" products and the requirements prescribed therein. 23. Pakistan Standards Quality Control Authority (PSQCA) is an autonomous body established under Pakistan Standards Quality Control Authority Act, 1996 (Act VI of 1996). It is a National Standards Body of Pakistan and its main objective is to develop Pakistan Standards related to services and products and also provide certification of mandatory articles, products and process under Certification Marks Scheme of PSQCA. The Standard development by the PSQCA is based on the Act VI of 1996 read with Pakistan Standards Rules, 2008. Preamble of the Act VI of 1996 reads as under: "WHEREAS it is expedient to establish a Pakistan Standards and Quality Control Authority to provide for the standardization and quality control services." 24. The PSQCA has formulated certain national ' standards for products in various business sectors and adopted different international standards as well. Only 166 items/products fall under the Mandatory List of PSQCA regulation for Certification Marks (CM) license. Other items/products may opt for Voluntary Certification. The standard formulated for "ice cream" is PS 969-2010, however, the item "ice cream" does not fall within the ambit of list of mandatory items to meet Pakistan Standards. 25. The Punjab Food Authority (PFA), on the other hand, has been established under the Punjab Food Authority Act, 2011 (Act XVI of 2011) with the objective of protecting public health and to provide for the safety and standards of food. PFA enforces food hygiene and quality standards as stipulated in the Punjab Food Authority Act, 2011, the Punjab Pure Food Rules, 2011 and the Punjab Pure Food Regulation, 2018. The said purpose is also enshrined in the Preamble of the Act of 2011 in the following manner:- "Whereas, it is expedient to protect public health, to provide for the safety and standards of food, to establish the Punjab Food Authority and for other connected matters." 26. Evidently, the Act XVI of 2011 and the Act VI of 1996, do not conflict with each other and each law has a distinct and separate scope. The Act XVI of 2011 is a provincial law, which primarily addresses the concerns regarding safety, standard and hygiene of food, whereas the Act VI of 1996 pertains to the standardization of a wide range of products for advancement of national economy and promotion of industrial efficiency and development It is also pertinent to mention here that the Rules, Regulations and Standards of the afore-stated two laws prescribe definitions of various products to fulfil their distinct and distinguished purposes. As per the decision of the Council of Common Interests (CCI) taken in its 44' Meeting, the framing of standards is the responsibility of PSQCA, whereas the enforcement of the standards falls within the ambit of the provincial authorities such as Punjab Food Authority. Whether frozen dessert and ice cream are similar or distinct products? 27. Now, we would like to address the question that whether frozen dessert and ice cream are recognized as two similar or different products. In order to examine this issue in its proper perspective, we have decided to analyse the matter from different dimensions as imperative and also consider the relevant foreign jurisprudence to develop a deeper understanding in this regard. 28. First: The review of historic perspective and background of the dispute is relevant here. M/s Yummy Milk Products (Pvt.) Limited filed a Writ Petition in Honourable Lahore High Court, Lahore against the Government of Punjab and M/s Lever Brothers Pakistan Limited (predecessor of the Respondent No.1), whereby the petitioner assailed a letter dated 17.09.1992 issued by the Government of the Punjab, Health Department. In the said letter, the Government of Punjab had permitted, as an interim arrangement, the use of vegetable fat in the ice cream with few conditions such as ice cream made of vegetable fat shall be labelled and sold under the name "non-dairy ice cream", and the words "Non- dairy" would be conspicuously prefixed with the word "ice cream". Furthermore, both types of ice cream
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i.e. dairy ice cream and non-dairy ice cream would be manufactured separately and labelled accordingly. 29. The Single Bench of Lahore High Court vide its judgment reported as 1999 CLC 1443, declared the said letter ultra vires to the main Act and illegal. It also observed that the two types of products must have different and quite distinguishable names because literacy rate in the country was very low and the main consumer of these products were children, therefore, the use of word "ice cream" could not be allowed for any such product. Against the said judgment, M/s Lever Brothers Pakistan Limited preferred an Intra Court Appeal before a Division Bench of Lahore High Court. The Division Bench of the Lahore High Court set aside the order of the learned Single Bench vide judgment reported as PLD 2000 Lah. 1. 30. Thereafter, M/s Yummy Milk Products (Pvt.) Limited filed an appeal against the order of the learned Division Bench before the Supreme Court of Pakistan. The appeal was disposed of by the August Supreme Court of Pakistan vide Order dated 27.02.2007 on the undertaking furnished by the Additional Secretary of Health Department, Government of the Punjab to the effect that Rules regarding milk and milk products would be revised under intimation to M/s Yummy Milk Products (Pvt) and the Respondent. The relevant excerpt from the order of the Supreme Court of Pakistan is reproduced herein below: "Pursuant to this Court order dated 1.2.2007 the Health Department has provided to the appellant and to contesting respondent No.4 copies of the Revised Rules for milk and milk products under which it is proposed to maintain the Rule that ice cream by whatever name it is called shall contain not less than 10 percent milk fat while a new name namely 'Frozen Dessert' is to be given to products manufactured with the use of derivatives of milk fat or 'vegetable fat or a combination of milk fat and vegetable fat. With the notification of these Revised Rules, the grievance of the appellant will stand satisfied. The Revised Rules are also acceptable to contesting respondent No.4 as indicated by Mr. Sharifuddin Pirzada, learned counsel for respondent No.4. They may now be notified by the Health Department." 31. Messrs Lever Brothers Pakistan Limited, the respondent No.4 before the Supreme Court (and presently Respondent No.1), raised no objection to such definition of frozen dessert before the Court. If the Respondent No.1 had really believed that the terms "frozen dessert" and "ice cream" were not distinct then it would not have given its consent to the proposal forwarded by the Health Department, Government of the Punjab in the said proceedings before the apex Court. This implies that the Respondent No.1 admittedly recognized both the terms separate and distinct from each other. It is pertinent to mention here that the Rules referred above were notified by the Government of Punjab in the year 2007 as Punjab Pure Food Rules, 2007 and "ice cream" and "frozen dessert" were defined accordingly as explained above. 32. Second: It is critical to note that PS 969-2010 (formulated under the Act VI of 1996) and Punjab Pure Food Regulations, 2018 (framed under the Act XVI of 2011) both recognize "ice-cream" and "frozen dessert" as two separate and distinct products. The same is evident from the definitions of the two products as provided in PS 969-2010 and Punjab Pure Food Regulations, 2018. Section 2.1.1 of PS-969- 2010 defines "ice-cream" and "frozen dessert" as follows:- "2.1.1 ICE-CREAM-The pure clean products made from a combination of milk or creams or other milk products with or without eggs, water, sugar and permitted food colors and flavor, with or without fruit juice, nuts, coffee, cocoas, or chocolate, syrup, confectionary and permitted Food Additives." 2.1.1.1 FROZEN DESSERT means the pure clean frozen product made from pasteurized mix prepared with the combination of milk and milk products, milk fat and/or edible vegetable oils or fats and milk protein or and vegetable protein products, with or without eggs, but with potable water, nutritive sweetening agents- like sugar, dextrose, fructose, liquid glucose, dried liquid glucose, malt dextrin, high maltose corn syrup, invert sugar, artificial sweeteners, honey and harmless flavoring and coloring agents, and with or without added stabilizer and emulsifier, and with or without fruit and fruit products, juices, nuts, coffee, cocoa or chocolate, syrup, cakes and bakery products and/or confections.
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Frozen Dessert by whatever name it is called is further classified as:- (i) "High Fat" shall contain not less than 36 percent of total solids and not less than 10 percent edible vegetable fat or oil (ii) "Medium Fat" shall contain not less than 30 percent of total solids and not less than 5 percent edible vegetable fat or oil (Hi) "Low Fat" shall contain not less than 26 percent of total solids and not less than 2.5 percent edible vegetable fat or oil" Similarly, Punjab Pure Food Regulations, 2018 define "ice-cream" and "frozen dessert" in the following manner:- "01.8.1…
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