SUPERMARKETS including Tesco and Sainsbury were today among 11 retail chains accused of anti-competitive pricing practices on tobacco products.
Tobacco giants Imperial Tobacco and Gallaher are also named in the Office of Fair Trading investigation, which comes just a week after the consumer watchdog announced a major inquiry into price-fixing in the construction industry.
The OFT's tobacc
o probe 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, 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: "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.
The release wrongly stated that Morrisons was the subject of a provisional finding of infringement in relation to the supply of butter and cheese in 2002 and 2003. It also said the supermarket had previously been warned by the OFT against anti-competitive behaviour, which was not the case.
A Tesco spokesman said: "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 details of their allegations."
The groups named in the inquiry now have around two months to respond to the OFT's statement of objections.
Companies involved in anti-competitive pricing practices can face fines of up to ten per cent of the relevant annual turnover – tobacco sales in this case – although penalties are generally less if businesses co-operate with an investigation.
The full article contains 415 words and appears in Edinburgh Evening News newspaper.
