Stores face cigarette price fix probe

SOME of Britain's top supermarket chains have been accused of anti-competitive pricing practices on tobacco products.

SOME of Britain's top supermarket chains have been accused of anti-competitive pricing practices on tobacco products.

Tobacco firms Imperial Tobacco and Gallaher are also named in the Office of Fair Trading investigation.

The OFT's tobacco investigation alleges that manufacturers and retailers struck deals to restrict the ability to determine selling prices independently, spanning three years between 2000 and 2003.

The OFT is also alleging that Gallaher and Imperial Tobacco co-ordinated indirectly with Asda, Sainsbury's, Shell, Somerfield and Tesco over proposed future retail prices between competitors between 2001 and 2003.

First Quench, Morrisons and the Co-operative Group are also named in the inquiry, which has been ongoing since 2003.

John Fingleton, chief executive of the OFT, said: "For markets to work well for consumers, it is a fundamental principle that pricing decisions should be made independently.

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"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."

The investigation comes just days after the OFT apologised to Morrisons and agreed £100,000 damages after making incorrect accusations against the retailer in a dairy price-fixing probe.

The OFT announced the settlement on Wednesday after Morrisons took legal action over a press release issued in September by the OFT at the same time as a statement of objections against a number of large supermarkets and dairy processors.

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