OFT slaps tobacco giants and retailers with record fine of £225m

The Office of Fair Trading yesterday slapped two tobacco giants along with some retailers with a record fine of £225 million after finding them guilty of price fixing.

Imperial Tobacco, the producer of Lambert & Butler cigarettes and Gallaher, the maker Benson & Hedges cigarettes, have been hit with fines of £112.3 million and £50.4 million respectively.

Morrisons has been hit with a fine of £19.5 million, while the Co-op and Shell have been slapped with fines of £17.9 million and £3.3 million respectively.

Some other retailers including Asda, One Stop Stores, Safeway, Somerfield and First Quench have also been fined.

Speaking on g the topic, the OFT's senior director of goods, Simon Williams, said, "Practices such as these, which restrict the ability of retailers to set their resale prices for competing brands independently, are unlawful.”

However, Imperial Tobacco, Morrisons and the Co-op have plans to appeal against the ruling.

The ruling came following a seven-year investigation into allegations that the tobacco makers had illegally hit deals with retailers between 2001 and 2003 to link the price of their brands to those of their rivals.