OFT Publishes Full Tobacco Retail Pricing Decision

The OFT has published its full decision on the tobacco investigation, in which it found that two tobacco manufacturers and ten retailers had engaged in unlawful retail pricing conduct, breaching the Chapter I prohibition of the Competition Act 1998 (the Act).  On 15 April 2010 the OFT announced its decision and handed down fines totalling £225 million on the parties involved in the infringements.  This is the largest fine that the OFT has imposed to date for breaches of UK competition law.  

The OFT's decision follows a lengthy investigation into the retail pricing actions of manufacturers and retailers, which began in 2003. 

The infringing agreements

A series of agreements was found to exist between each manufacturer and each retailer (the infringing agreements).  The infringing agreements enabled the manufacturers and retailers to co-ordinate the setting of retail prices for the tobacco products.  This was done in order to achieve certain "parity" and