Alleged Tobacco price fixing April 27th, 2008

The Office of Fair Trading (OFT) has alleged that tobacco companies and supermarkets have been colluding to fix the retail price of tobacco.  Most of the main players are named including Sainsbury’s, Tesco and Asda plus tobacco firms Gallaher and Imperial Tobacco, who between them own the major cigarette brands.

The allegation is that all parties shared information on the future prices of tobacco and cigarette’s thus not allowing the retailers to determine the prices independently. Technically this is not price fixing as there is no definite agreement between the manufacturers and retailers and so the term used is ‘retail price co-ordination’.  In reality it still means that the man in the street is probably paying over the odds for his fags.