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25/04/2008
Watchdog Inquiry Into Tobacco Price Fixing
A watchdog has alleged that a number of leading supermarkets have been involved in price-fixing of tobacco products.
The Office of Fair Trading (OFT) has also named tobacco manufacturers Gallahers and Imperial Tobacco as allegedly colluding to fix the prices of its products and swap information about future products.
The retailers involved are Asda, the Co-Operative Group, First Quench, Morrisons, Safeway, Sainsburys, Shell, Somerfield, T&S Stores, Tesco and TM Retail.
The OFT said in a statement released today: " The OFT alleges that these tobacco manufacturers and retailers variously engaged in one or more unlawful practices in relation to retail price for some or all of a number of tobacco products in breach of the Competition Act 1998."
Competition law prohibits almost any attempt to fix prices including agreeing prices with competitors and cutting prices below cost in order to force a weaker competitor out of the market.
The alleged infringements took place at various time periods between 2000 and 2003.
John Fingleton, OFT Chief Executive said: "For markets to work well for consumers, it is a fundamental principle that pricing decisions should be made independently. If we find evidence of anti-competitive activity, we are prepared to use the appropriate powers to punish the companies involved and to deter other businesses from taking part in such behaviour.
"If proven, the alleged practices would amount to a serious breach of the law."
Imperial Tobacco said in its statement of objections released today: "Imperial Tobacco takes compliance with competition law very seriously and rejects any suggestion that it has acted in any way contrary to the interests of consumers."
Tesco is reported as saying that it "does not believe that Tesco has acted in a way that has harmed customers".
The OFT stressed that it should not be assumed that the parties involved have broken the law and the OFT will decide if the law has been broken after it has reviewed any responses to the statement of objections.
The allegations come on the back of a payout of £100,000 being paid to Morrisons yesterday for being falsely accused of price fixing dairy products.
Related story:Morrisons Awarded Damages For False Accusations
(DS/KMcA)
The Office of Fair Trading (OFT) has also named tobacco manufacturers Gallahers and Imperial Tobacco as allegedly colluding to fix the prices of its products and swap information about future products.
The retailers involved are Asda, the Co-Operative Group, First Quench, Morrisons, Safeway, Sainsburys, Shell, Somerfield, T&S Stores, Tesco and TM Retail.
The OFT said in a statement released today: " The OFT alleges that these tobacco manufacturers and retailers variously engaged in one or more unlawful practices in relation to retail price for some or all of a number of tobacco products in breach of the Competition Act 1998."
Competition law prohibits almost any attempt to fix prices including agreeing prices with competitors and cutting prices below cost in order to force a weaker competitor out of the market.
The alleged infringements took place at various time periods between 2000 and 2003.
John Fingleton, OFT Chief Executive said: "For markets to work well for consumers, it is a fundamental principle that pricing decisions should be made independently. If we find evidence of anti-competitive activity, we are prepared to use the appropriate powers to punish the companies involved and to deter other businesses from taking part in such behaviour.
"If proven, the alleged practices would amount to a serious breach of the law."
Imperial Tobacco said in its statement of objections released today: "Imperial Tobacco takes compliance with competition law very seriously and rejects any suggestion that it has acted in any way contrary to the interests of consumers."
Tesco is reported as saying that it "does not believe that Tesco has acted in a way that has harmed customers".
The OFT stressed that it should not be assumed that the parties involved have broken the law and the OFT will decide if the law has been broken after it has reviewed any responses to the statement of objections.
The allegations come on the back of a payout of £100,000 being paid to Morrisons yesterday for being falsely accused of price fixing dairy products.
Related story:Morrisons Awarded Damages For False Accusations
(DS/KMcA)
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