Retailer fined in OFT tobacco probe

14 July, 2008

Thresher parent company First Quench Retailing has been fined by the OFT after an investigation into price fixing on tobacco.

The company has been penalised for linking the retail price of a manufacturer’s brand to that of a competing product from another supplier in a period from March 2000 to mid-2003, during which time it was owned by Whitbread/Allied Domecq, and private equity groups Nomura and Terra Firma.

First Quench has been fined a portion of a combined £173.3 million penalty handed out to Asda, Somerfield, TM Retail, One Stop Stores and tobacco manufacturer Gallaher, for offences in the early part of the decade.

Sainsbury’s was granted immunity from punishment after being first to agree to work with the OFT’s investigation team.

Gallaher’s share of the fine is well over half, and the combined penalty could come down to £132.2 million if the parties agree to support an ongoing investigation against the Co-op, Morrisons, Safeway, Shell, Tesco and Imperial Tobacco.

OFT chief executive John Fingleton said: “The OFT’s objective is to make markets work well for consumers and the economy alike.

“A cornerstore of this is the principle that companies should set their prices independently.”

Thresher’s current regime declined to comment.

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