Angela Jameson
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Smokers may have been overcharged for cigarettes after the Office of Fair Trading (OFT) accused two big tobacco companies and 11 retailers of alleged unlawful co-ordination of prices.
The OFT has issued a statement of objections detailing the charges against Gallaher, which makes the Silk Cut and Benson & Hedges brands, and Imperial Tobacco, whose brands include Lambert & Butler and Embassy.
The retailers that have been issued with a statement of objections include all four major supermarket groups: Tesco, J Sainsbury, Asda and Wm Morrison, as well as the Co-operative Group, the off-licence group First Quench, Shell, Somerfield and the convenience store groups T& S Stores and TM Retail.
The competition watchdog alleges that at various times between 2000 and 2003 these tobacco manufacturers and retailers made arrangements that restricted the ability of each retailer to determine its selling price independently.
This was achieved by linking the retail price of a manufacturer's brand to the retail price of a competing brand of another manufacturer.
In the case of Gallaher, Imperial Tobacco, Asda, Sainsbury, Shell, Somerfield and Tesco, the OFT also alleges that they indirectly exchanged information on proposed future retail prices.
Tesco immediately indicated that it would dispute the charges. A spokesman for the UK's biggest supermarket group 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."
Sainsbury's also said it was confident of immunity after helping the OFT with its investigation. "Sainsbury’s has co-operated fully with the OFT since 2003 and, as a result, can expect total immunity from any potential resulting fines in the event the OFT concludes there has been an infringement," the supermarket group said in a statement.
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.
"If we find evidence of anticompetitive 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."
He added: "If proven, the alleged practices would amount to a serious breach of the law."
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The anti smoking brigade are on there high horse again...
Well
What damage are people doing to the environment when they start up there cars....
No wonder child asthma and lung related ailments are on the rise...
As for price fixing .... Its not the first time and it wont be the last.
Kezzer, stoke on trent, England
OFT , how about going after the manufacturers of the razor blades who ALL seem to charge extortionate prices for them. That has got to be fixed prices for a bit a mass produced metal and plastic moulding.
John, Woking, Surrey
Do European countries suffer from price fixing, and do they each have the equivalent of the OFT? If not, why not, or is chicanery like this a British phenomenon?
Dwight Vandryver, Scholar Green, Cheshire, UK
It's time the Office of Fair Trading began to live up to its august name. The retail trade is full of ramps and fiddles but the real
rip offs like permanent 'Half Price' offers and 'Buy one, get one Free' are never addressed.
Maurice Smith, Medway, Kent
So its okay for the government to tax fags to discourage smoking, we all agree on the health risks these days but its not O.K. for the supermarkets to do the same sort of thing ,
can anyone explain the logic if there is any, I could do with a smopke to settle my nerves, pity I gave up years ago.
W Watkin, andover, UK
How dare they!
Don't they realise that artificially forcing up the price of cigarettes is the Government's job?
Andrew, Taunton,
I used to work for a major supplier to the then major supermarket chains and we had to tell each buyer what prices the other chains were buying at. If we didn't our orders, would be affected. got given shopping lists at Christmas time from the buyers telling us what to buy their families.
Henson Webb, Woodstock,
Ah yes the evil smokers clogging up the NHS this opinion is tired and unfounded compare the cost of treating smoking related illnesses to that of treating overweight children and their parents but there is no outcry for large taxes on unhealthy foods? we will choose to save ourselves or not thanku
S Willetts, Sutton coldfield,
Going by the majority of comments it looks like its time to put alcohol up to ten pounds a pint and car tax up to a thousand pounds a year. Fact, treating smoking related illness costs 2.5 billion a year. Cigarette tax revenue 10 billion a year. Profit to spend on non smokers 7.5 billion.
Cromwell, Leeds, England
Ah, but alcohol kills more people in the UK then smoking! The amount of noise there has been about the small rise in price of drinks! Cigarettes are a product that for better or worse are on sale to the public and therefore should fall under the watch of OFT.
Frank Lloyd, Cheltenham, England
So what! If people want to destroy their health by continuing to smoke after all the evidence that it is lethal, then let them get ripped off financially too. Hopefully, the small retailers will find its not worth the hassle of selling tobacco, & the greedy giant concerns will price it out of reach.
Anne Wotana Kaye, London, England
Good.
Fix the price...At 10 pounds a packet.
Think of the money people could save, the health service could save, and the people we could save....
M.Jones, Cardiff,
whatever, cigarette has harm to people's health, i wish they could charge more.
cty, zhejiang, china
Hahahaha. Welcome to the LaLa land of regulation in Labour land. Fix the price of fags? Yer 'avin' a larf. The government DEMANDS cheap fags and will go to any lengths to get cheap fags for our 'consumers'. Abuse of power monopoly/ oligopoly utilities? No prob, carry on chaps regardless.
Jonathan Spencer, London, United Kingdom
More Price Fixing eh! Suprise, Suprise!!
Bread and Mike as well as tabs! They price fix everything we need and use everyday!!
They should do a "three strikes and your out" method for these corrupt company's like Asda and Tesco.
Boss's should be doing prision streches. Fines are useless.
Andy T, England,
Tesco says: "We do not believe that Tesco has acted in a way that has harmed consumers."
Given that cigarette packets are plastered with health warnings I love the delicious irony of Tesco's statement!
Sean, Surrey, UK
1. Smoking is bad for you and the price of cigarettes is made high by tax to discourage smoking.
2. Supermarkets have been condemned for selling alcohol very cheaply and promoting drinking.
3. Supermarkets are condemned for collusion and keeping cigarette prices high.
How bizarre.
James, London,
Shocking. Next thing you know, crack dealers will be doing the same.
Eugene, heidelberg, germany