In the competitive realm of energy drinks, the clash between Sting (Pepsico) and Storm (Mezan Beverages) has unfolded into a protracted legal saga. What began with allegations of deceptive marketing and packaging mimicry has evolved into a larger narrative, exposing the challenges faced by the Competition Commission of Pakistan (CCP) in ensuring a fair and competitive market.
The Genesis: Clash of Energy Drinks
1. A Bottled Dispute
The dispute originated from the striking similarity between the packaging of Sting and Storm energy drinks. Sting, a flagship product of Pepsico, accused Mezan Beverages of intentional mimicry, aiming to confuse consumers and divert sales in their favor.
2. Legal War Unleashed
Pepsico took the matter to the CCP, triggering a five-year legal battle that has yet to reach resolution. The case sheds light on the intricate challenges faced by regulatory bodies in curbing deceptive marketing practices.
The Legal Maneuvers: Mezan’s Playbook
3. Challenging the Constitutionality
In a strategic move, Mezan Beverages filed a writ petition challenging the constitutionality of the Competition Act 2010 itself, the legislative foundation under which the CCP operates. This tactical move cast a two-year shadow over the initial stages of the CCP’s investigation.
4. Labyrinth of Jurisdiction
Mezan’s legal maneuvers extended to challenging the CCP’s jurisdiction, questioning its authority in both inter-provincial and intra-provincial matters. The writ petition became a focal point for debates on the regulatory competence of the CCP.
The Legal Odyssey: CCP’s Uphill Battle
5. Lahore High Court’s Verdict
In a landmark judgment on October 26, 2020, the Lahore High Court upheld the constitutionality of the Competition Act, providing a green light for the CCP to proceed with its investigations. However, this was not the end of Mezan’s legal resistance.
6. Show Cause and Stay Orders
The CCP, after an exhaustive investigation, issued a show cause notice to Mezan Beverages on July 7, 2021. Instead of responding, Mezan once again secured a legal sanctuary by obtaining a stay order from the Lahore High Court, this time challenging the show cause notice itself.
The Larger Implications: CCP’s Struggle Against Stay Orders
7. Legal Labyrinth Strategy
Mezan’s legal tactics reflect a common strategy employed by companies facing scrutiny from the CCP. The playbook involves entangling the regulatory body in legal complexities, diverting attention from the core issues and delaying proceedings.
8. Pending Cases and Unpaid Fines
The Mezan-CCP case is not an isolated incident. The CCP grapples with a staggering 559 pending cases across various sectors, entailing fines of Rs. 68 billion. This legal entanglement undermines the effectiveness of the CCP’s efforts to curb anti-competitive practices.