CCP TO CURB DECEPTIVE MARKETING BY FOOD FIRM

ISLAMABAD, 07 NOVEMBER 2013: The Competition Commission of Pakistan (CCP) has concluded an enquiry and issued a show cause notice to Shangrila (Pvt.) Limited for indulging into alleged deceptive marketing practices by making a claim of being 'No. 1 tomato ketchup in Pakistan'.

CCP received a complaint from National Foods Limited alleging that Shangrila has recently launched a marketing campaign through print and outdoor advertising media all across Pakistan for ‘Shangrila Ketchup’ and claimed that their ketchup is ‘No 1 in Pakistan’.

 

It was also alleged in the complaint that the claim of Shangrila is prominently displayed on all of its advertisements and lacks a reasonable basis, related to character, suitability for use, or quality of goods in violation of Section 10 of the Competition Act, and the Marketing campaign is capable of harming the business interest of National Foods.

CCP's Office of Fair Trade (OFT) has initiated an enquiry against the claim made by Shangrila and concluded that the overall net impression of the marketing campaign/advertisement is that ‘Shangrilla is Pakistan’s No. 1 Tomato Ketchup’, whereas the actual market share of National Foods was higher than Shangrila. National foods holds a major share in the Total Urban Pakistan in the category of Ketchup. It has a market volume share of 49.2 and value share of 50.8 whereas Shangrila  ketchup has the market volume share of 20.7 and value share of 20.1 at the time of marketing campaign.

It was also noted that Shangrila has made Brand of the Year Award the basis to authenticate its claim of being No.1 in Pakistan. However, upon enquiry, Brands Foundation has clarified that their award never empower the receiver to make a claim of being No.1 in Pakistan.

The CCP enquiry concluded that the claim of Shangrilla not only lacks a reasonable basis regarding character, suitability for use, or quality of goods but is also capable of harming the business interest of National Foods in violation of Section 10 of the Competition Act. Therefore a show cause notice was issued to ShangriIa for making a deceptive claim during their advertising and they were called upon for hearing on a given date.

CCP is mandated under the Competition Act to ensure free competition in all spheres of commercial and economic activity to enhance economic efficiency and to protect consumers from anti competitive behavior including deceptive marketing practices. A number of actions have been taken by CCP to stop deceptive marketing practices.