The Competition Commission of Pakistan CCP at FMC has inflicted a total penalty of Rs170 million on manufacturers and distributors of Walls and Omore products for “misleading consumers” that they were “selling frozen desserts” when they were “actually selling ice cream.”
Some of these companies are Unilever Pakistan which produces the “Walls” and Friesland Campina Engro that produces “Omore”. As per the standard of Pakistan Standards and Quality Control Authority (PSQCA), an ice cream is the food product prepared from the dairy product, which includes milk & cream. On the other hand, “frozen desserts” are produced using dairy products together with vegetable oils. Being commercial manufactured brands, they are manufactured with the ingredients of the frozen dessert category and therefore, to market them as an ice-cream is a violation.
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The CCP’s action stems from a complaint filed by M/s Pakistan Fruit Juice Company (Private) Limited, the makers of “Hico” ice cream, which alleged that the two companies had misrepresented their frozen desserts as ice cream through extensive advertising campaigns on television and social media. The complaint highlighted that such marketing misled consumers, distorting the understanding of what constitutes true ice cream.
Following a formal inquiry, the CCP issued show-cause notices to the two companies. During investigation, the Commission referred to standards outlined by the PSQCA. The distinctions were emphasised in the ruling to clarify that the products marketed as “ice cream” by the defendants did not meet the necessary criteria under the regulations.
Besides the penalties pertaining to misleading labels, the CCP also fined Unilever Pakistan Rs. 20 million for false and misleading advertisements and representations on the nutritional values of its frozen desserts and for promoting them as health-ier than dairy based ice-cream. Thus a practice was identified that the act found to be violating Section 10(2)(c) of the Competition Act leading to the additional fine.
CCP’s decision also cited legal actions by the respective bodies of food regulation in USA, Australia and India wherein such misbranding have attracted penalties for the so-called frozen desserts with claims of being ice creams. The United States Food and Drug Administration (FDA) had previously prosecute companies for false and misleading advertising associated with frozen dessert products.
The CCP also ordered both companies to stop using the term ‘ice cream’ to advertise their frozen dessert products. The companies were told to take down the same misleading ads across all forms of media and digital platforms and post clear disclosure statements about what was in their products to avoid confusion among consumers. Pursuant to this order, actions that must be taken include a compliance report that has to be filed to the CCP within 30 days of the order.
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