CCP investigation into beverage company halted – Pakistan ReadingS


ISLAMABAD: Competition Commission of Pakistan’s investigation into deceptive marketing practices by a beverage company has been stalled for the last five years due to the court’s stay order.

Mezan Beverages (Private) Limited allegedly used legal techniques to pursue its case against the CCP in the courts. Since launching an investigation in August 2018 into Mezan’s alleged involvement in deceptive marketing practices, the company has obtained injunctions on two separate occasions.

Mezan submitted a petition on October 12, 2018 and decided to stay the execution against the initiation of an investigation. The stay order lasted two years. LHC vacated the accommodation on October 26, 2018.

On June 28, 2021, the CCP completed its investigation and issued a show-cause notice to Mezan on July 7, 2021.

On August 3, 2021, Mezan received another stay order from the LHC against the CCP’s notice of cause. The accommodation scheme continues from August 2021 until today.

The investigation was initiated when CCP received a formal complaint against Mezan Beverages (Private) Limited from Pepsi Co Inc. The complaint stated that Mezan copied the general packaging of Pepsi’s energy drink “Sting” for Mezan’s energy drink “Storm.”

It is pertinent to note here that the Supreme Court has discouraged interference with the legal jurisdiction of public sector entities. According to the Supreme Court, the law provides adequate remedies and constitutional jurisdiction should be exercised only in exceptional cases.

In September this year, the Supreme Court of Pakistan unanimously upheld the CCP’s legal powers to initiate investigations and gather information.

In 2020, the CCP launched an investigation to obtain information from edible oil and ghee companies to obtain information about ghee and edible oil prices. Dalda Foods challenged the investigation in the Islamabad High Court (IHC).

The IHC had canceled the CCP’s call for an information letter and the launch of an investigation. The supreme court had imposed extraordinary requirements on the exercise of the CCP’s regulatory and investigative powers.

The CCP had challenged the Supreme Court’s decision before the Supreme Court of Pakistan.

While accepting the CMK’s appeal, the Supreme Court set aside these requirements, including the need to provide detailed justification when initiating an investigation against an enterprise and to make a reasoned decision in this context.

Therefore, the CCP’s stance and actions were confirmed in the Supreme Court’s historic and landmark decision.

Copyright Business Recorder, 2023

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