CCP issues show cause notice to company

ISLAMABAD: The Competition Commission of Pakistan (CCP) has issued a show cause notice to Options International (SMC-Pvt.) Limited for, prima facie, fraudulently selling “Starbucks” Coffee in Pakistan.

Starbucks, an international chain of coffeehouses registered in the State of Washington, sent a formal complaint to the CCP that Options Coffee and More, a Lahore-based restaurant, was fraudulently using its official trademark, “Starbucks Coffee,” deceiving consumers and harming its business interest. Starbucks said that it had not opened any franchise in Pakistan.

The Commission’s enquiry found that Options had displayed the Starbucks trademark prominently on the main signage board of its cafés, the packaging materials, mugs, menus, flyers, its website, and Facebook page. It claimed it was offering Starbucks coffee made in Starbucks machines using the same method of production and giving customers the authentic Starbucks experience.

The inquiry report said that by making these claims, Options International had, prima facie, violated Section 10 of the Competition Act by disseminating false and misleading information to deceive consumers and harm the business interest of the complainant.

Although Options was selling ‘Starbucks coffee’, it admitted that it was not an authorised franchisee of Starbucks International. In the absence of any contractual arrangement with Starbucks, it had no legitimacy to sell Starbucks coffee or make the claims to that effect.

On recommendations of the inquiry report, a show cause notice has been served on Options International and the company has been directed to respond in writing within fourteen days. 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 practices including deceptive marketing practices.