This article is from the source 'bbc' and was first published or seen on . It will not be checked again for changes.

You can find the current article at its original source at http://news.bbc.co.uk/go/rss/-/1/hi/business/7366348.stm

The article has changed 9 times. There is an RSS feed of changes available.

Version 0 Version 1
Retailers in tobacco price probe Retailers in tobacco price probe
(20 minutes later)
The Office of Fair Trading (OFT) has alleged tobacco firms and supermarkets are engaged in unlawful practices linked to retail prices for tobacco. The Office of Fair Trading (OFT) has alleged tobacco firms and supermarkets have been engaged in unlawful practices linked to retail prices for tobacco.
The OFT names 11 retailers, including Asda, Sainsbury and Tesco, and tobacco firms Imperial Tobacco and Gallaher.The OFT names 11 retailers, including Asda, Sainsbury and Tesco, and tobacco firms Imperial Tobacco and Gallaher.
It alleges that deals between cigarette companies and retailers limited the retailers' ability "to determine its selling price independently". One allegation is that retailers and tobacco groups arranged to swap information on future pricing.
The price charged was linked to competitors' prices, it said. A separate allegation is that there was an understanding that the price of some brands would be linked to rival brands.
Arrangements between manufacturers and retailers linked the retail price of one brand to that of a competing brand, the OFT alleges. 'Information exchange'
In the case of Gallaher, Imperial Tobacco, Asda, Sainsbury, Shell, Somerfield and Tesco, there was an indirect exchange of proposed future retail prices between competitors, it adds. Retailers named AsdaThe Co-operative GroupFirst QuenchMorrisonsSafewaySainsburyShellSomerfieldT&S StoresTescoTM Retail
The alleged infringements took place between 2001 and 2003. The OFT said understandings between cigarette companies and retailers between 2000 and 2003 limited the retailers' ability "to determine its selling price independently".
In the case of Gallaher, Imperial Tobacco, Asda, Sainsbury, Shell, Somerfield and Tesco, there was an indirect exchange of proposed future retail prices between competitors, it adds, allegedly between 2001 and 2003.
"This is not about price fixing," an OFT spokeswoman said
"This is about retail price co-ordination, which is also illegal.
"We have information that manufacturers and retailers were indirectly exchanging information about future prices."
Secret investigation
The OFT has been building up its case in secret for five years and refuses to say whether it has been helped by a whistleblower, the BBC's business editor Robert Peston said.
If we find evidence of anti-competitive activity, we are prepared to use the appropriate powers to punish the companies involved John Fingleton, OFT chief executive
Even now, the OFT says there should be no assumption that any of the named companies have broken the law.
But if they are found to have done so, they could be fined up to 10% of annual turnover - or tens of millions of pounds.
"For markets to work well for consumers, it is a fundamental principle that pricing decisions should be made independently," said OFT chief executive John Fingleton."For markets to work well for consumers, it is a fundamental principle that pricing decisions should be made independently," said OFT chief executive John Fingleton.
"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," he added."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," he added.
"If proven, the alleged practices would amount to a serious breach of the law.""If proven, the alleged practices would amount to a serious breach of the law."