Big retailers accused of unlawful tobacco practices

The Office of Fair Trading (OFT) is investigating the role of several major stores in alleged anti-competitive behaviour over the price of tobacco.

Eleven big retailers and two tobacco companies have been named by the OFT, in a statement of objections published today.

The OFT is looking into alleged arrangements that it says "restricted the ability of each of these retailers to determine its selling prices independently". If proven, the arrangements would be unlawful under the Competition Act 1998.

"This is not about price fixing," said an OFT spokesperson, quoted by BBC News."This is about retail price co-ordination, which is also illegal."

Companies named in the statement are the tobacco firms Imperial Tobacco and Gallaher, plus retailers Asda, the Co-operative Group, First Quench, Morrisons, Safeway, Sainsbury, Shell, Somerfield, T&S Stores, Tesco and TM Retail.

Several of the accused firms have issued statement denying any activity that would harm consumer interests.

A spokesperson for Tesco said that the OFT's investigation appeared to centre on the 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."

Meanwhile, Imperial Tobacco said that it "[takes] compliance with competition law very seriously and rejects any suggestion that it has acted in any way contrary to the interests of consumers."