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Six retailers and tobacco firms have agreed to pay a maximum of £173.3m in combined fines after admitting unlawful tobacco pricing practices.

The news comes after the Office of Fair Trading (OFT) in April accused a number of retailers and tobacco companies of anti-competitive retail pricing.

Asda, Somerfield, First Quench, TM Retail, One Stop Stores and tobacco firm Gallaher have agreed to the fines.

The OFT is continuing its investigation into a further six firms.

They are Imperial Tobacco, Tesco, Shell, the Co-operative Group, Morrisons and Safeway.

Leniency

The OFT said that some of the fined companies had applied for leniency and if discounts for leniency and quick resolution were given, the total penalty amount would be £132.3m.

It said Sainsbury’s was the first to apply for leniency and would thus escape any fine if the supermarket continued to co-operate.

"The early co-operation of these parties has enabled the swift resolution of some of this case," said John Fingleton, OFT chief executive.

"The OFT’s objective is to make markets work for consumers and the economy alike," he added.

The OFT alleged that the retailers and tobacco groups arranged to swap information on future pricing.

A separate allegation is that there was an understanding that the price of some brands would be linked to rival brands.

Imperial Tobacco owns brands such as Embassy, John Player Special and Lambert & Butler while Gallaher’s best-selling products include Benson & Hedges and Silk Cut.

The OFT said in April understandings between cigarette companies and retailers between 2000 and 2003 limited the retailers’ ability "to determine its selling price independently"

PRAGUE - Czech tobacco group Philip Morris CR sees no reason for further tax hikes on cigarettes in the next several years after the last rise at the start of the year, weekly Euro reported, citing the group’s new CEO.
‘After a rise in the consumer tax in January 2008, the Czech Republic fulfilled and passed the minimum tax, and therefore we do not see a reason for raising the rate for several years,’ Euro quoted Alvise Giustiniani as saying in an interview.
The tobacco group’s Czech market share has eroded in recent years amid fiercer competition and tax hikes on cigarettes, and analysts expect the company to face challenges in 2008 due to strong stockpiling from competitors.

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."

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WASHINGTON — U.S. Congress on Wednesday moved a step closer to handing the Food and Drug Administration broad new authority to regulate tobacco and cigarettes products, despite concerns voiced by many lawmakers that the agency cannot handle its current workload.
The House Energy and Commerce Committee voted 38-12 for legislation that would allow the FDA to reduce nicotine levels and require larger and more informative health warnings on cigarette packs. A Senate committee has already approved similar legislation.
Energy and Commerce Committee Republicans were divided on the legislation, with 11 voting for it. Those who opposed it said the agency has had enough trouble ensuring the safety of the nation’s food supply and medicine. "This legislation, if it becomes law, would require the FDA to take on a task that is enormous, complex and completely outside its regulatory experience," said Rep. Joe Barton, R-Texas, the ranking Republican on the committee. "It will almost necessitate a diversion from its core functions."
Barton said the Federal Trade Commission was better suited for the job. But Rep. Henry Waxman, D-Calif., said the "unfortunate state of affairs" at the FDA did not mean the agency should ignore the harms of tobacco.
"It simply means that when we give the agency this additional responsibility, we also must give it the resources necessary to handle the job and to handle it well," Waxman said. To address concerns about resources, the legislation calls for the assessment of user fees on tobacco companies. The assessments could initially generate $90 million this year. By 2018, that amount would increase to $755 million. Aides said the fees would be assessed based on market share.
Health groups have been highly supportive of the legislation. "This bill will put a stop to decades of Big Tobacco marketing, aimed at addicting each new generation of young people to their deadly products," said Daniel Smith, president of the American Cancer Society Cancer Action Network.
More than 400,000 people die from smoking-related illnesses each year. Rep. Jane Harman, D-Calif., noted that both of her parents died from lung cancer, and she asked lawmakers to consider the financial toll that additional smokers generate when they come down with smoking-related illnesses. Proponents say various aspects of the legislation would deter people from taking up cigarettes or from using cigarettes that they may view as less dangerous because of their labeling.
The legislation would ban candy-flavored cigarettes, which attract younger smokers. It would also prohibit terms such as "light" or "mild" which many consumers mistakenly believe means the products are safer. The Bush administration has voiced qualms about giving the agency responsibility for tobacco regulation because some people could get a false sense of security about the safety of tobacco products.
For decades, the FDA said it lacked authority to regulate tobacco so long as cigarette makers did not claim that smoking provided health benefits. In 1996, it reversed course and cited new evidence that the industry intended its products to feed the nicotine habits of the roughly 45 million Americans who smoke. Tobacco companies sued, and the case eventually landed in the Supreme Court. In 2000, the court ruled 5-4 that Congress did not authorize the FDA to regulate tobacco.
Some smaller tobacco manufacturers endorsed the legislation after it was amended so that they would have more time to meet new testing and reporting requirements. The National Association of Convenience Stores also said it would no longer oppose the bill, though the trade group stopped short of endorsing it. Lawmakers amended the legislation so that retailers getting orders to stop selling tobacco because they illegally sold tobacco to minors could have the orders modified or terminated if it’s determined they took effective steps to prevent such sales.
Also, some lawmakers representing districts with a strong tobacco farming presence voted for the bill after it was amended so that products containing foreign-grown tobacco would have to meet the same standards applied to domestically grown tobacco.

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.