Pursuant to a complaint by an individual, the Competition Commission initiated an enquiry into six fruit juice manufacturers for misleading consumers and engaging in deceptive marketing practices under the Competition Act 2010.
The complaint alleged that the respondents had been involved in the distribution of false and misleading information during the marketing of their products by claiming that the juices they manufactured were 100% pure and natural and contain no additional sugar, colours or preservatives. Additionally, it was alleged that these claims lacked a reasonable basis and were capable of harming the business interests of other undertakings engaged in similar business. It was further alleged that products which are 100% pure and natural do not require the ingredients as listed on the packaging of the fruit beverages available in the market.
The enquiry committee investigated the matter to ascertain whether:
- the respondents had disseminated false and misleading information concerning the character, properties, suitability for use, method of production or quality of goods in violation of Section 10(2)(b) of the Competition Act; and
- the respondents' conduct was capable of harming the business interests of other undertakings in violation of Section 10(2)(a) of the act.
The enquiry committee established that on the basis of their content, fruit beverages have been categorised as juices, nectars and still drinks. The committee's initial findings revealed that the respondents had made unjustified claims about their products in the following manner, which amounted to the distribution of false and misleading information:
- Nestle Pakistan Limited had provided unsubstantiated claims on the packaging of its Nestle Fruita Vitals Orange Juice product that it contained "100% Orange Juice". Other Nestle Pakistan Limited nectar and fruit drink products were found to contain similar disclosures.
- Shezan International Limited had claimed on the packaging of its All Pure product that it contained "100% Juice" and was "Rich in Vitamin C". The ingredients label for its apple juice indicated that the product was made from "apple juice", while the front label indicated that the product was made from concentrate.
- AF International had claimed on the packaging of its Topix product that it contained "Mango 100%" and was "Pure Fruit Juice", which indicated that the juice contained no artificial ingredients. However, the ingredients label indicated that the beverage was manufactured from several other ingredients, including artificial colours and flavours, and Topix therefore could not be categorised as a juice.
- Maaher Food Industries (Private) Limited's packaging for its Country product claimed that it came "From 100% Pure Fruits". This unsubstantiated claim gave the impression that the beverage was made from 100% pure fruit without the addition of any unnatural ingredients.
- Citropak Limited's packaging for its Fruitien product claimed that the product was "100% Pure", while its ingredients label claimed that the beverage was manufactured from concentrate. As such, it could not be considered as 100% pure or be categorised as a juice. The claim that Fruitien contained no sugar or preservatives was substantiated by analytical lab tests.
- The packaging of Sunland Foods' Fruit Farm product stated that it contained "100% Pure Guava Juice", "100% Pure Mango Juice", was "Rich in Vitamin C" and had "Natural Flavors, [and] No Artificial Colors". However, the product's ingredients label indicated that it had been prepared from concentrate. Thus, the claims made by Sunland Foods were unsubstantiated.
The enquiry committee concluded that the respondents' marketing of their fruit juice brands to consumers using unjustified claims amounted to the distribution of false and misleading information to the general public, which could harm the business interests of other undertakings engaged in similar business within the same industry.
The committee recommended that, in the interest of the general public, proceedings be initiated against the respondents for violation of Section 10 of the Competition Act.
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For further information on this topic please contact Sanaya F Vachha at Vellani & Vellani by telephone (+92 21 3580 1000) or email ([email protected]). The Vellani & Vellani website can be accessed at www.vellani.com.