In a significant move aimed at safeguarding consumer rights, the Competition Commission of Pakistan (CCP) on Friday imposed a combined penalty of PKR 170 million on two major players in the country’s frozen desserts market. The manufacturers and distributors of Walls (Unilever Pakistan) and Omore (FrieslandCampina Engro) were found liable for misleading consumers by marketing their frozen desserts as “ice cream.”
Penalties and Violations
- PKR 75 million each on Unilever Pakistan and FrieslandCampina Engro
– Both companies are penalized for deceptive marketing wherein they portrayed their frozen desserts as ice cream through advertisements on television and social media. - Additional PKR 20 million on Unilever Pakistan
– Unilever faced an extra fine for making false comparisons in its advertising, suggesting that its products were “healthier” than genuine dairy ice cream. The CCP ruled that these comparisons violated Section 10(2)(c) of the Competition Act.
Background of the Case
The CCP launched its inquiry following a complaint filed by M/s Pakistan Fruit Juice Company (Private) Limited. The complainant alleged that Unilever and FrieslandCampina were actively engaged in deceptive marketing practices by labeling and promoting their vegetable-fat-based frozen desserts as genuine dairy ice cream.
Following a formal inquiry and the issuance of show-cause notices to both companies, the CCP held hearings, led by Members Salman Amin and Saeed Ahmed Nawaz. The resulting order upheld the complaint, concluding that the marketing campaigns in question misled consumers and contravened the Competition Act.
Distinct Definitions Under Food Standards
Citing the Pakistan Standards and Quality Control Authority (PSQCA) PS 969-2010 and the Punjab Pure Food Regulations 2018, the CCP emphasized that frozen desserts and ice cream are two different products:
- Ice Cream
– Made from milk, cream, or other dairy products. - Frozen Dessert
– Made from a pasteurized mix that may include milk, milk products, and edible vegetable oils.
The CCP’s order also referenced food quality standards in the USA, Australia, and India, where regulatory authorities reserve the term “ice cream” exclusively for dairy-based products. Notably, the U.S. Food and Drug Administration (FDA) had previously penalized a company for misbranding frozen desserts as ice cream.
Compliance Directive
As part of the CCP order, both companies must:
- Cease advertising frozen desserts as ice cream
- Remove all deceptive materials from their digital and social media platforms
- Ensure clear labeling that distinguishes frozen desserts from dairy ice cream
- Submit a compliance report within 30 days of the order
Past CCP Actions Against Unilever
This is not the first time Unilever Pakistan has come under the CCP’s scrutiny. Earlier this year, the commission imposed a PKR 60 million fine for airing “deceptive claims” in television commercials for the company’s “Lifebuoy (Care and Protect) Soap” and “Lifebuoy Hand Wash.” At the time, Unilever stated its intent to challenge the decision, maintaining that it is a “responsible marketer” and a member of the Pakistan Advertisers Society.
Looking Ahead
The CCP’s ruling sets an important precedent in regulating how food products are labeled and marketed in Pakistan. By underscoring the distinction between dairy-based ice cream and non-dairy frozen desserts, the Commission aims to ensure transparency and fairness for consumers. Compliance with these directives will likely reshape advertising strategies for major frozen dessert brands in the country, ensuring that customers are not misled about the nature and composition of the products they purchase.
