CCP Fines Al-Ghazi Tractors Rs. 40 Million for Misleading Fuel Efficiency Claim
ISLAMABAD – The Competition Commission of Pakistan (CCP) has imposed a Rs. 40 million penalty on Al-Ghazi Tractors Limited (AGTL) for violating competition laws by disseminating a misleading advertisement about fuel efficiency.
A CCP bench led by Chairman Dr. Kabir Ahmed and Member Salman Amin found AGTL guilty of falsely promoting its New Holland tractor models as offering “up to 30% extra diesel savings compared to any competitor’s tractors” — a claim made in a front-page Urdu-language newspaper ad published in January 2022.
Investigation Findings:
- AGTL cited a report from the Agricultural Mechanization Research Institute (AMRI), Multan, as the basis of its claim.
- However, CCP’s investigation revealed that AMRI had issued no such report, and had formally warned AGTL to stop using its name in misleading ways.
- The referenced report only compared AGTL with one competitor, not the entire market.
- AMRI clarified that the report offered only general energy efficiency guidance, not an endorsement.
Despite these clarifications, AGTL’s ad implied a universal performance claim — misleading consumers, especially small-scale farmers, many of whom rely heavily on accurate product information for long-term investment decisions.
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Legal Proceedings:
- In January 2024, the CCP issued a show-cause notice to AGTL following complaints from stakeholders.
- AGTL’s counsel argued that no comprehensive inquiry had been conducted and that the ad was misinterpreted.
- The CCP bench ruled that there was sufficient evidence under Section 30 of the Competition Act, adding that a full inquiry under Section 37 was not necessary.
CCP’s Statement:
In its press release, the Commission emphasized the broader impact of deceptive advertising in Pakistan’s agricultural sector, which supports over 60% of the population.
“For small-scale farmers, a tractor is a critical and long-term investment. Being influenced by exaggerated fuel efficiency claims can lead to financial losses, harming livelihoods and undermining trust in the market,” said the CCP.
The ruling serves as a warning to other companies engaging in false advertising practices, particularly in sectors that affect economically vulnerable populations.
