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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"

TALLAHASSEE — Legislation that would mandate safer-burning cigarettes designed to reduce home fires will soon land on Gov. Charlie Crist’s desk.

On Monday, the Senate unanimously approved new cigarette standards for tobacco companies, following the House’s lead Friday.

Nearly two dozen other states and Canada have adopted similar standards, which by 2010 would require the so-called fire-safe cigarettes.

They contain "speed bumps" - two or three rings of less porous paper - that cause the cigarettes to extinguish themselves if they are left unattended.

"The fact of the matter is it (smoking) is a leading cause of house fires in the United States, and it’s a preventable tragedy," said Sen. Lee Constantine, R-Altamonte Springs, who sponsored the bill. "Now, it’s not going to stop all cigarette fires, but it will stop a significant number. I would say 75 percent."

All tobacco wholesalers and retailers must sell only those cigarettes or risk monthly fines that could total no more than $100,000 and $250,000, respectively.

The tobacco industry, which supported the legislation (HB 1167), insists the costs of the special wrapping paper or bands to reduce cigarette ignition is negligible.

But tobacco representatives would not detail to what extent the new cigarettes along with state inspection and certification costs would cost Florida smokers.

"If you look historically at the states that have enacted this legislation, the list price for cigarettes we have offered has not changed as a result of these laws being enacted," said Bill Phelps, a spokesman for Altria, the parent company of Philip Morris USA.

Constantine said the savings of safer burning cigarettes would outweigh any increase in a pack of cigarettes.

Florida Fire Marshal Les Hallman said smoking-related fires in the state in 2006 and 2007 caused more than $6.3 million in property losses.

Many times, home fires result when smokers fall asleep with or don’t properly extinguish a lit cigarette.

The human toll in that period was nine deaths and 64 injuries, including seven firefighters, Hallman added.

One pro-smokers group says self-extinguishing cigarettes’ effectiveness can’t be measured.

"You can’t say the fire-safe cigarette is the reason for a reduction in fires," Maryetta Ables, a representative with FORCES Inc., an advocacy group against smoking restrictions.

"There’s no difference in the number of smoking-related deaths or fires" before or after the cigarette ignition standards.

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.