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Leading retailers investigated for price fixing

By Katie Bird , 25-Sep-2008

A number of leading UK consumer goods retailers and suppliers are being investigated for price fixing.

The investigation covers a number of product categories including health and beauty products such as Aquafresh toothpaste and grocery items such as PG Tips, according to a report published in the Financial Times.

Those involved have now been informed of the investigation by the UK Office of Fair Trading (OFT) in the ‘interests of transparency’.

According to the FT report, it was the UK supermarket chain Asda that triggered the investigation, after it uncovered information in an e mail search that responded to a separate price investigation.

Tesco has also reportedly sent e mails to the watchdog.

The OFT confirmed they were investigating a number of players, however they did not disclose the particulars of the case.

“The OFT is conducting an ongoing investigation into potential breaches of competition law by a number of retailers and suppliers, across a range of product areas.

“In the interests of transparency, the OFT has written to all the parties providing an update on the investigation. It is inappropriate to give any further detail at this stage,” the watchdog said in a statement.

If the companies were to be found guilty of anti-competitive behavior they risk significant fines, although whistle blowers can be exempt from payments.

The investigation has been underway for sometime and back in April personal care giants Procter and Gamble and Unilever confirmed they had been approached by the OFT.

At the time the OFT sent out a statement confirming they had visited a number of company premises and made several requests for information form a number of retailers and suppliers, and confirmed it did not enter such investigations lightly.

“The OFT does not embark on such investigations without having met certain statutory thresholds and having had a rigorous internal review.”

Cartels are not uncommon within the personal care industry. Earlier this year a number of leading companies, including Unilever, were fined for price fixing by the German competition regulations for colluding to raise prices.

Sara Lee, Unilever and two units of Henkel were fined a total of €37m in February this year for price fixing at the start of 2006.

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