Tobacco Industry Hit with Fines

Source from:  channel4.com ITN 11 Jul 2008 07/14/2008

Six retailers and tobacco firms have been fined £132 million after admitting fixing prices illegally. In April the Office of Fair Trading accused Asda, Somerfield, First Quench, Gallaher, One Stop Stores (formerly T&S Stores), and TM Retail of working together on an anti-competitive pricing strategy, linking the price of cigarette brands to rival products. The firms had applied for leniency from the watchdog and agreed to pay individual penalties which come to £132.3 million. The fines were discounted from a total of £173.3 million because the companies admitted infringements of the Competition Act 1998, which prohibits agreements that may have a damaging effect on competition. Sainsbury's - which first came forward for leniency from the OFT - will avoid any financial penalty if it continues to co-operate with the probe. But the OFT investigation against a further six firms - the Co-operative Group, Imperial Tobacco, Morrisons, Safeway, Shell and Tesco - is ongoing. OFT Chief Executive John Fingleton said: "The OFT's objective is to make markets work well for consumers and the economy alike. A cornerstone of this is the principle that companies should set their prices independently." Enditem