First Quench fined for tobacco pricing fix

16 April, 2010

First Quench has been fined almost £2.5 million by the Office of Fair Trading for its part in a tobacco price fixing scandal.

The OFT ruled that Gallaher, Imperial Tobacco and 10 retailers broke the law, and has imposed fines totalling £225 million.

Other retailers involved are Asda, The Co-operative Group, Morrisons, One Stop Stores (formerly T&S Stores), Safeway, Sainsbury’s, Shell, Somerfield and TM Retail.

First Quench went into administration last November, making it unlikely that any of its fine will be paid.

The OFT said that each manufacturer had a series of individual arrangements with each retailer whereby the retail price of a tobacco brand was linked to that of a competing manufacturer’s brand, breaching the Competition Act 1998.

Simon Williams, the OFT’s senior director of goods, said: “Practices such as these, which restrict the ability of retailers to set their resale prices for competing brands independently, are unlawful. They can lead to reduced competition and ultimately disadvantage consumers.

“This enforcement action will send out a strong message that such practices, which could in principle be applied to the sale of many different products, can result in substantial penalties for those who engage in them.”

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