Tesco to contest OFT fine

From the Morning Star



Tesco threatened to take legal action against a competition watchdog today that gave the supermarket giant a £10 million fine for its alleged role in a dairy price-fixing scandal.



Tesco was among nine firms that the Office of Fair Trading judged to have colluded to rig the price of cheese and milk in 2002 and 2003.



The penalties imposed by the OFT total nearly £50m but the scandal is thought to have hit their customers' pockets to the tune of £270m.



Originally the OFT had intended to fine guilty parties more than £116m but it scaled back the penalties after a period of consultation.



Supermarket chains Asda, Sainsbury's and Safeway and dairy processors Arla, Dairy Crest, McLelland, the Cheese Company and Wiseman all received lenient fines after admitting liability.



Left Economics Advisory Panel co-ordinator Andrew Fisher said that it was not hard to see where the real looters are.



He said: "It is very welcome that the OFT has decided to act on behalf of consumers who are being hit with outrageous price hikes by energy companies, supermarkets and banks.



"As LEAP highlighted in its March report, British supermarkets have hiked prices at a higher level than their European counterparts. They are looting people's wages to maintain their fat-cat profits. It's a rich irony that these fat cats are overcharging for cream."



But Tesco stands alone in denying it had anything to do with the price fixing of dairy products stating it will defend its position "vigorously" and "through the courts if necessary."



The supermarket's director of corporate and legal affairs Lucy Neville-Rolfe said: "We are disheartened and disturbed that the OFT continues to pursue this costly and time-consuming case at the expense of both the taxpayer and British business.



"We have always said we did not collude on prices on cheese and we stand firm in our rebuttal of these ongoing allegations."



But the OFT defended its decision and the watchdog's chief executive John Fingleton said the fines send "a strong signal" to supermarkets, suppliers and other businesses that adopt anti-competitive tactics.

Tobacco retailers hit with £225 million fine

Morning Star
by Louise Nousratpour

The competition watchdog has fined 10 retailers and two tobacco manufacturers £225 million for "unlawful practices" in pricing of cigarettes, cigars and rolling tobacco.

The fine - the largest total ever imposed by the Office of Fair Trading (OFT) - came after Imperial Tobacco and Gallaher struck "price-matching" arrangements with retailers in which the prices of their tobacco products were linked to those made by rivals.

The watchdog said that the agreements over price fixing between rival brands were "unlawful" because "they can lead to reduced competition and ultimately disadvantage consumers."

Left Economic Advisory Panel co-ordinator Andrew Fisher welcomed the OFT fines, which he said exposed "the lies in the rhetoric of big business. Far from the mythical free-market economy, big business seeks a monopolised stranglehold over consumers."

Mr Fisher added: "The value of the OFT has also been highlighted and it's no surprise that the favourite party of big business - the Tories - is calling for a 'bonfire of the quangos.' Both consumers and government revenues would be worse off without the OFT."

The retailers caught up in the case were Asda, the Co-operative Group, First Quench, Morrisons, One Stop Stores (formerly T&S Stores), Safeway, Sainsbury's, Shell, Somerfield and TM Retail - the owner of the McColls and Martins chains.

Safeway has since been bought by Morrisons, the Co-operative has acquired Somerfield and First Quench, which owned off-licence Threshers, went into administration last year.

Imperial Tobacco, whose tobacco brands include Lambert & Butler, received the biggest fine - £112.3m - but denied "categorically" that its pricing practices were anti-competitive or affected consumers.

The group plans to appeal.