The Competition Commission of Pakistan (CCP) imposed a hefty penalty of Rs. $170 million against two leading frozen dessert companies for misleading marketing practices, including false advertising of their products as “ice cream.”
The sanctioned companies include Unilever Pakistan, which markets the Walls brand, and FrieslandCampina Engro, known for its Omur brand. Both companies were fined Rs. 75 million each for deceptive advertising practices.
One would think that these two companies are the largest ice cream market share holders with their “o’more” and “Walls” brands. However, this is where the confusion exists.
According to the standards set by Pakistan Standards and Quality Control Authority (PSQCA), “ice cream” is a product made from dairy ingredients such as milk and cream. Meanwhile, “frozen desserts” are made with a mixture of dairy products and vegetable oils. Both brands due to their commercial manufacturing status are made from frozen dessert category ingredients, therefore marketing them as ice cream is a violation.
The CPC’s action stems from a complaint filed by Pakistan Fruit Juice Company (Pvt) Limited, maker of Heiko 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 misleads consumers and distorts the understanding of what constitutes real ice cream.
After an official investigation, the Chinese Communist Party issued show-cause notices to the two companies. In its investigation, the Committee referred to the criteria set by the PSQCA. The differences in judgment were emphasized to show that the products marketed as “ice cream” by the defendants did not meet the necessary standards under the regulations.
In addition to the penalties for misleading product labeling, the CPC also imposed a fine of Rs. Unilever Pakistan fined $20 million for making false claims in its advertising, specifically marketing frozen desserts as healthier than ice cream containing dairy products. This practice, which was found to violate Article 10(2)(c) of the Competition Act, resulted in the additional fine being imposed.
The CPC’s decision also cited international legal precedent, including actions by food regulatory agencies in the USA, Australia and India, where similar misbranding cases have led to penalties for falsely marketing frozen desserts as “ice cream”. The US Food and Drug Administration (FDA) has previously penalized companies for misleading marketing related to frozen dessert products.
In its ruling, the Chinese Communist Party directed the two companies to immediately stop referring to their frozen desserts as “ice cream” in their advertising campaigns. Companies have been directed to remove misleading advertisements from all platforms, including digital channels, and provide clear disclosures about the contents of their products to prevent further consumer confusion. A compliance report detailing these procedures must be submitted to CCP within 30 days of the request.
The Chinese Communist Party stressed that its role is to protect consumers, ensure fair competition in the market, and take a strong stance against deceptive practices.