Tobacco pricing policy under OFT spotlight…
Eleven retailers, including the big four UK supermarkets, and two of the world's biggest tobacco manufactures have been accused of unlawful pricing practices by the Office of Fair Trading.
The OFT has issued a statement of objections outlining allegations against tobacco manufacturers Imperial Tobacco and Gallaher, as well as Tesco, Asda, Morrisons, Sainsbury's, Safeway, Somerfield, the Co-operative Group, First Quench, Shell, T&S Stores, and TM Retail.
At various times between 2000 and 2003, the tobacco manufacturers and retailers are alleged to have made price-fixing arrangements that restricted the ability of selling prices to be set independently.
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It is also alleged that Gallaher, Imperial Tobacco, Asda, Sainsbury's, Shell, Somerfield and Tesco indirectly exchanged pricing information between 2001 and 2003. If the allegations are found to be true, the manufacturers and retailers would be in breach of the 1998 Competition Act.
John Fingleton, OFT Chief Executive, says: "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."
A Tesco spokesman says "The OFT's investigation appears to centre on major tobacco companies. We do not believe that Tesco has acted in a way that has harmed consumers and we will make this clear to the OFT when we see the full details of their allegations."
