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Tobacco Firms, Retailers Coordinated Prices, OFT Says (Update4) 

Tesco Plc, Imperial Tobacco Group Plc and 11 other companies were accused of coordinating cigarette prices between 2000 and 2003 in the U.K. antitrust regulator's first formal probe of tobacco sales.

The Office of Fair Trading said today it found evidence of 11 retailers and two manufacturers linking the price of tobacco brands made by competing companies. The regulator in London is also examining whether Imperial, Japan Tobacco Inc.'s Gallaher unit and five retailers shared information on prices. . . .

``A manufacturer would ask the retailer to sell his brand X at the same price or at a coordinated price below his competitor's brand Y,'' Gladstone said. ``There were also instances where manufacturers informed retailers about future pricing in the knowledge that retailers would likely tell rival manufacturers.''

The regulator said it may, where applicable, seek to attribute liability to parent companies. The companies can now file arguments refuting the OFT's so-called statement of objections, which lays out the regulator's findings.

Japan Tobacco, which acquired Gallaher last year for $15.4 billion, said it has been fully cooperating with the OFT.

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