The Competition Commission of Pakistan served notice last month of a finding that Hi-Tech Blending (Pvt) Ltd. used false and misleading statements in a promotion of Zic brand lubricants.
Hi-Tech officials refuted the findings and said they will appeal the decision, which was based on a complaint by Chevron Pakistan Lubricants.
Chevron Pakistan lodged its complain last year over a Hi-Tech campaign that included television and social media advertisements, as well as printed brochures. Hi-Tech manufactures, markets and distributes Zic lubricants in Pakistan on behalf of SK Lubricants of South Korea.
According to a February summary by CCPs Enquiry Committee, Chevron Pakistans complaint focused on a Hi-Tech claim that no other lubricants available in the market perform better than Zic. Chevron Pakistan alleged that the claims are misleading because other products meet the same and that the claims gave Hi-Tech an undue advantage over competitors.
The CCP directed Hi-Tech to cease making the claims in question and instead to use more transparent promotions. It did not appear to impose a fine. Chevron Pakistans complaint had sought a penalty of 10 percent on the annual turnover of the company or 75 million rupees (U.S. $479,000).
A senior Hi-Tech official, who spoke on condition that he not be identified, told Lube Report, Chevron Pakistan has manipulated our stand. The complaint is based on a TV advertisement, where we stated there is no better oil than Zic. We never said Zic is the best oil.
The Hi-Tech officials claimed their company is assembling an appeal that includes 700 pages of documents that refute the findings on 70 points. They also complained, though, that CCP is short of technical expertise to examine such complaints and said Hi-Tech is prepared to appeal to Pakistans court system if penalties are imposed. The CCP did not respond to Lube Reports requests for comment.
The CCP is an independent quasi-regulatory, quasi-judicial body that helps ensure healthy competition between companies for the benefit of the economy. The commission prohibits deceptive market practices, abuse of a dominant position in the market and certain types of anti-competitive agreements.