The fine, the largest ever levied by the watchdog, comes after a seven-year investigation found that tobacco manufacturers had struck deals with retailers that linked the price of their cigarettes and tobacco with rival brands, restricting the retailer's ability to set its own prices. The OFT said the companies had "engaged in unlawful practices in relation to retail prices for tobacco products in the UK".
The largest fine, of £112m, has been imposed on Imperial Tobacco, makers of Lambert & Butler and Golden Virginia, followed by a fine of £50m imposed on Gallaher, home to Benson & Hedges and Silk Cut and owned by Japan Tobacco. Between them the two companies make close to nine out of every 10 cigarettes and roll-ups smoked in the UK. The tobacco market in the UK is worth an estimated £13bn.
The OFT also fined 10 retailers – Asda, The Co-operative Group, First Quench, Morrisons, One Stop Stores (formerly T&S Stores), Safeway, Sainsbury's, Shell, Somerfield and TM Retail – with the heaviest fines of £14m being imposed on both Asda and the Co-Op.
The OFT added that it had decided not to pursue allegations against Tesco because of insufficient evidence.
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