Argos and Littlewoods fined £23m for toy price-fixing

Two of Britain's best-known high street stores were fined a record £22.7m yesterday for having a price-fixing deal with the giant toymaker Hasbro, whose products include Monopoly, Action Man and spin-offs from The Tweenies.

The Office of Fair Trading (OFT) found that Argos and Littlewoods had made an agreement with Hasbro, which controls nearly a fifth of Britain's £2bn toy market, not to discount the price of its products. That meant inflated sales and profits for the companies, the OFT concluded.

Argos, the UK's biggest toy retailer, was fined almost £17.3m while Littlewoods, through its Index catalogue store arm, was fined almost £5.4m. The sizes of the fines are based on the companies' respective turnovers, and are the largest imposed by the watchdog for price-fixing under the 1998 Competition Act.

Hasbro escaped a possible fine of £15m because it "blew the whistle" on Argos and Littlewoods and co-operated with the OFT, confessing in September 2001 to having taken part in the scheme.

But the two retailers angrily denied the charges yesterday, saying they had never participated in the alleged price-fixing, and pledged to fight the fines and challenge the judgment at a Competition Commission tribunal.

Argos said that the claims were based on "unreliable and contradictory testimonies provided solely by Hasbro, which has been found guilty in a prior case and has negotiated full leniency in return for supporting the OFT's unfounded case against Argos".

The Consumers' Association welcomed the fines for sending the message that "price-fixing will not be tolerated". It constituted "theft from the consumer".

Supermarkets noted that, since the OFT investigation, the toy companies' stranglehold on prices had weakened. Paul Crier, toy general manager for Asda, said that in the past supermarkets relied on "international" or "grey market" supplies of toys from manufacturers such as Hasbro.