Deceptive Marketing’: CCP’s battle with Mezan Beverages’ Sting-lookalike Storm continues

ISLAMABAD: Mezan Beverages (Private) Limited, a prominent player in the beverages industry, has been entangled in a legal battle with the Competition Commission of Pakistan (CCP) for the past five years, employing strategic court stay orders to impede the ongoing enquiry.

As per the details shared by the CCP, the saga began in August 2018 when the CCP initiated an enquiry into Mezan's alleged involvement in deceptive marketing practices. This was prompted by a formal complaint filed by PepsiCo Pakistan. The complaint accused Mezan of mimicking the packaging of Pepsi's famous energy drink "Sting" for its own energy drink "Storm."

Mezan swiftly responded with legal maneuvers, filing a writ petition on October 12, 2018, leading to a two-year stay order against the initiation of the enquiry. Later, the Lahore High Court (LHC) vacated the stay on October 26, 2018, allowing the CCP to resume its investigation. Subsequently, on June 28, 2021, the CCP completed its enquiry, issuing a show cause notice to Mezan on July 7, 2021.

Undeterred, Mezan secured another stay order from the LHC on August 3, 2021, against the CCP's show cause notice. This has prolonged the legal standoff, leaving the outcome of the enquiry in limbo.

The legal saga continued with a parallel incident in 2020 when the CCP initiated an inquiry seeking information from cooking oil and ghee companies regarding pricing. Dalda Foods challenged this enquiry in the Islamabad High Court (IHC), resulting in the IHC setting aside CCP's call for information letters and initiation of the enquiry. The IHC also imposed stringent requirements on CCP's regulatory and enquiry powers.

In response to this setback, the CCP took the matter to the Supreme Court of Pakistan in September 2023. The apex court, in a historic and landmark judgment, unanimously upheld the statutory powers of the CCP related to the initiation of enquiries and gathering of information.

The Supreme Court's ruling set aside the extraordinary requirements imposed by the IHC, including the need for detailed reasoning when initiating an enquiry and passing a reasoned order. This judgment reaffirms the authority of the CCP in enforcing fair competition practices, however the current delay in result on the Mezan beverage case, once again brings into question CCP’s statutory prowess.