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Cigarette maker Gallaher and retailers including Asda and Somerfield have been fined over £173m following a price-fixing investigation by the Office of Fair Trading.

A large proportion - £93m - will be paid by Gallaher, whose brands include Benson & Hedge and Silk Cut.

The fines follow a five-year investigation into price setting and the passing of sensitive information in the UK tobacco industry between 2000 and 2003.

The OFT said the size of the fines would be reduced to £132.3m if the companies, which had applied to the watchdog for leniency, continued to support the investigation.

The size of Gallaher’s fine, disclosed by its owner, Japan Tobacco, is based on the company benefiting from the leniency reduction.

The other retailers fined were First Quench, One Stop Stores and TM Retail. Sainsbury’s, the first company to apply for leniency, has escaped without a fine.

The OFT - which expects to close its case early next year - said the investigation into Co-Op, Imperial Tobacco, Morrisons, Safeway, Shell and Tesco was continuing.

Asda said: "Everyone at Asda is very sorry about what happened… though we can’t turn back the clock there are lessons to be learned and we will learn them."

LONDON — Authorities in a Scottish city are offering smokers food vouchers if they quit.

Health officials in Dundee say ex-smokers will be given $25 a week on an electronic card. The credits can be redeemed in stores for fresh food and groceries, but not alcohol or cigarettes.

Participants in the pilot program will get help giving up cigarettes and will have to undergo weekly carbon monoxide breath tests to prove they have not started again.

Authorities said Saturday that the project will start in the fall. They hope it can help 900 people quit smoking over the next two years.

Dundee is Scotland’s fourth-largest city and has one of Britain’s highest smoking rates.

TOKYO, — Domestic cigarette sales fell by 4.3% to 258.5 billion cigarettes in the year ended March 31, marking a ninth straight year of decline, the Tobacco Institute of Japan said Thursday.
The decrease is attributed to the growing trend to quit smoking, as well as tighter smoking-related regulations. Last fiscal year’s sales figure is down 26% from the fiscal 1996 peak.
In fiscal 2007, sales of domestically produced cigarettes slid 4.1% to 167.8 billion, while imports sank 4.6% to 90.7 billion.
Japan Tobacco Inc. (TSE:2914) saw its market share edge up 0.1 percentage point to 64.9%, its first such gain since the company’s 1985 privatization.
As for the outlook, JT expects the market to "keep declining about 4-5% every year," according to Executive Vice President Mitsuomi Koizumi.
Asked about the impact, if any, of the age-verifying cigarette vending machines that have debuted in two Kyushu prefectures, Koizumi says: "More people are buying cigarettes at convenience stores for now, but there has been no impact on overall sales."

In a legal victory for the tobacco industry, a federal appeals court on Thursday threw out an $800 billion class-action lawsuit on behalf of smokers who said they were misled that light cigarettes were safer than regular ones.
Plaintiffs’ lawyers had wanted to represent potentially millions of people across the country who had smoked light cigarettes, but the court found that it was impossible to tell why smokers chose light cigarettes, so the group could not be treated as a class. Instead, smokers will have to sue individually.
“Individualized proof is needed to overcome the possibility that a member of the purported class purchased lights for some other reason than the belief that lights were a healthier alternative,” the ruling said.
The unanimous ruling by a three-judge panel of the United States Court of Appeals for the Second Circuit means that individuals can still pursue lawsuits against cigarette makers, but they cannot be grouped together as a class.
Stocks of big tobacco companies were little changed by news of the ruling, which was not entirely unexpected. Shares of the Altria Group, which owns Philip Morris USA, maker of Marlboro cigarettes, were up 2 cents, to $22.06, in mid-afternoon trading Thursday in New York. Stock in Reynolds American, whose R. J. Reynolds Tobacco unit markets the Camel brand, were up 14 cents, to $59.85.

The budget cuts lawmakers are considering to health programs for the poor are unconscionable — especially when a reasonable increase of the tax on cigarettes could raise badly needed money.
Florida’s 34-cents-a-pack tax is the fifth lowest in the country and hasn’t changed in 20 years. The average cigarettes tax nationally is $1.12 a pack. By adding $1 to a pack of cigarettes, Florida could move its tax in line with most other states and raise $1 billion.
That’s about the same amount the Legislature is looking to cut from the state’s human-services budget. The $1 billion in cuts would decimate optional programs under Medicaid, which pays for the health care of poor Floridians. That includes children and the disabled and programs such as hospice care for the dying and hospitalization for transplant patients.
Cutting Medicaid programs also means losing matching federal tax dollars, which is shortsighted. While increasing a tax isn’t always smart public policy, in this case it is. Studies show that when states increase the cigarettes tax, more people quit smoking. Teens, who can’t afford the higher costs, are the most likely to quit or not to start in the first place. In the long run, that will mean the state will save billions of dollars in years to come, because there will be fewer people suffering from cigarette-related diseases. As fewer smoke, revenues will drop, but, over time, so will the need.
It doesn’t make sense that Florida’s cigarette tax is so low. Lawmakers should be discouraging people from getting sick, not making it easier.