Page last updated at 18:44 GMT, Friday, 11 July 2008 19:44 UK

Six firms fined in tobacco probe

Cigarettes on sale
The OFT said retailers and tobacco groups swapped information

Six retailers and tobacco firms have agreed to pay a maximum of 173.3m in combined fines after admitting unlawful tobacco pricing practices.

The news comes after the Office of Fair Trading (OFT) in April accused a number of retailers and tobacco companies of anti-competitive retail pricing.

Asda, Somerfield, First Quench, TM Retail, One Stop Stores and tobacco firm Gallaher have agreed to the fines.

The OFT is continuing its investigation into a further six firms.

They are Imperial Tobacco, Tesco, Shell, the Co-operative Group, Morrisons and Safeway.

Leniency

The OFT said that some of the fined companies had applied for leniency and if discounts for leniency and quick resolution were given, the total penalty amount would be 132.3m.

It said Sainsbury's was the first to apply for leniency and would thus escape any fine if the supermarket continued to co-operate.

"The early co-operation of these parties has enabled the swift resolution of some of this case," said John Fingleton, OFT chief executive.

"The OFT's objective is to make markets work for consumers and the economy alike," he added.

The OFT alleged that the retailers and tobacco groups arranged to swap information on future pricing.

A separate allegation is that there was an understanding that the price of some brands would be linked to rival brands.

Imperial Tobacco owns brands such as Embassy, John Player Special and Lambert & Butler while Gallaher's best-selling products include Benson & Hedges and Silk Cut.

The OFT said in April understandings between cigarette companies and retailers between 2000 and 2003 limited the retailers' ability "to determine its selling price independently".




SEE ALSO
OFT gets first cartel convictions
12 Jun 08 |  Business
Retailers in tobacco price probe
25 Apr 08 |  Business
Imperial Tobacco's profits grow
30 Oct 07 |  Business
Imperial hit by 140m merger cost
19 Mar 08 |  Business

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