The Competition Commission of Pakistan (CCP) has imposed a Rs. 40 million fine on Al-Ghazi Tractors Limited (AGTL) for misleading consumers about extra diesel savings from its vehicles.
In a statement, the CCP noted that farmers across Pakistan, especially small landholders, often make purchasing decisions based on savings and efficiency. For them, it said, a claim of “up to 30% extra diesel savings” can mean the difference between affordability and hardship. However, it regretted, AGTL had made the false and misleading assertion in a newspaper ad, misguiding consumers and violating competition law.
The case pertains to a front-page page issued by AGTL in a leading Urdu newspaper in January 2022. The ad claimed AGTL’s new Holland tractor models offered “up to 30% extra diesel savings compared to any competitor’s tractors.” It cited a report by the Agricultural Mechanization Research Institute (AMRI) Multan as the basis of its claim.
However, said the CCP, an investigation found that AMRI had not issued any report supporting this claim, adding the institute had warned AGTL to stop using its name for false claims and retract the advertisement. The AMRI report, which AGTL selectively quoted, only tested tractors from two manufacturers—AGTL and one competitor. It did not provide market-wide fuel efficiency comparisons. AMRI also emphasized that its report contained general energy-saving tips, not certification of any tractor model’s performance.
Despite this, AGTL promoted the 30% savings claim as if it applied across the board. The CCP received complaints from stakeholders, leading to a show-cause notice in January 2024.
Legal defense
During proceedings, AGTL’s lawyer challenged the show-cause notice, arguing the CCP did not conduct a full inquiry and had misinterpreted the ad. However, the CCP ruled that it had enough evidence to proceed under Section 30 of the Competition Act and did not require a formal inquiry under Section 37.
The CCP noted that in rural Pakistan, where over 60% of the population relies on agriculture, such deceptive ads could seriously impact small farmers. A tractor is often a once-in-a-decade investment and believing a false fuel-saving claim could lead farmers to spend more in the long run, harming their fragile financial balance.
CCP Chairman Kabir Ahmed Sidhu urged the public to share information with the Commission (03040875255 or miu@cc.gov.pk) about any association involved in sharing price-sensitive data, assuring confidentially.