Deceptive marketing practices: CCP slaps Rs18m penalty on electric cable makers

ISLAMABAD: With appointment of two members the Competition Commission of Pakistan (CCP) has become functional and has slapped penalty of Rs18 million on electric cable manufacturers in the country for allegedly plunging into deceptive marketing practices.

According to statement issued by the CCP here, the Commission has passed an order imposing a total penalty of Rs18 million on 18 electric cable manufacturers for violating Section 10 of the Competition Act, 2010 by hiding the presence of cash/cash coupons inside the packaging of electric wire cable bundles from consumers.

The CCP conducted an enquiry on receiving information that many electric wire manufacturing companies were inserting cash/cash coupons inside the bundle packs of electric wire but they were not disclosing this on the packaging or other promotional material.

The practice only benefits the electricians who generally open the packs and deceives the end consumers who ultimately pay for the value of the coupons but are unaware of it. CCP enquiry found 18 electric cable manufacturers including Dawn Cables, GM Cables, Fast Cable, Hitech English Cables, Pak Muzaffar Cable, Alfa Plus Wire Cable, Hi Ace English Cable, Gold Royal Cable, Zafar Cable, Nation Cable, Puller Cable, Welcome Cables, Dewan Cables, E-Flux Cables, Hero Cable, Falcon Cable, Lear Cables and Rana Cables inserting cash coupons of various denominations in the packing of their electric cable/wire bundles and not disclosing it anywhere.

During the hearings, most of these cable manufacturers admitted their involvement in the deceptive practice and made commitments to stop doing so in the future. The order stated that the insertion of token in the electric cable packs without due disclosure is a violation of Section 10 as the product lacks a reasonable basis related the price printed for the consumer.

The order imposed a penalty of PKR 5 million each on Fast Cables and GM Cables and Pipes, and PKR 500000 (five hundred thousands) each on remaining 16 cable manufacturers, directing them to refrain from indulging in any form of deceptive marketing practices in the future.

The commission has also directed these companies to disclose the presence and the coupon’s value in their marketing material, and publish four advertisements of A-4 size in 2 English, 2 Urdu newspapers of national circulation informing the public about the presence and price value of coupons. Moreover, they were also directed to visibly print the token’s value on the packaging, and submit compliance report within 60 days to Registrar of the Commission.

CCP is mandated under the Competition Act to ensure free competition in all spheres of commercial and economic activity, to ensure economic efficiency and to protect consumers from anti-competitive practices indulging deceptive marketing.