The Competition Commission of Pakistan (CCP) has penalized Al-Ghazi Tractors Limited (AGTL) with a hefty fine of Rs. 40 million after the company was found guilty of making a deceptive fuel-saving claim in a public advertisement.
The claim in question stated that AGTL’s New Holland tractors delivered “up to 30 percent extra diesel savings compared to any competitor’s tractors.”
Published in January 2022 in a widely circulated Urdu-language newspaper, the ad attributed its claim to the Agricultural Mechanization Research Institute (AMRI), Multan. However, a CCP investigation revealed that AMRI had not issued any such report. The institute not only denied the endorsement but also formally warned AGTL against misusing its name and demanded the withdrawal of the advertisement.
The report AGTL relied upon did not offer a broad market comparison. Instead, it only covered performance tests between AGTL tractors and those of a single competitor. Furthermore, AMRI clarified that the report was intended merely as general guidance on energy efficiency, not as a validation of any particular model’s performance.
CCP Responds to Stakeholder Complaints
As complaints poured in from stakeholders concerned about the ad’s accuracy, the CCP initiated formal proceedings.
The CCP issued a show cause notice in January 2024, and AGTL defended itself by claiming that the Commission had misinterpreted the content and failed to conduct a full inquiry.
Despite this defense, the CCP bench, comprising Chairman Dr. Kabir Ahmed and Member Salman Amin, determined that there was enough evidence under Section 30 of the Competition Act to proceed. The bench concluded that a formal inquiry under Section 37 was not necessary, given the clarity of the misleading nature of the ad.
With over 60% of Pakistan’s population linked to agriculture, the consequences of such claims go beyond marketing ethics. Tractors represent a significant, long-term investment, especially for small-scale farmers. The CCP emphasized that false efficiency claims can distort purchasing decisions, potentially leading to financial strain and long-term losses for vulnerable communities.
CCP’s Final Word
In its statement, the CCP highlighted the broader issue:
“Farmers across Pakistan, especially small landholders, often make purchasing decisions based on savings and efficiency. For them, a claim like ‘up to 30% extra diesel savings’ can mean the difference between affordability and hardship.”
This case serves as a reminder of the critical importance of accuracy and transparency in advertising, particularly when targeting sectors that heavily rely on trust and factual information.
