Argos fined £17m for toy price-fixing

And Littlewoods hit with £5m bill after fair trading investigation

The retailers Argos and Littlewoods were today fined a record £22.6 million by the Office of Fair Trading for fixing the price of toys and games made by Hasbro.

An investigation by the OFT concluded that Argos and Littlewoods had entered into anti-competitive agreements with the toy giant between 1999 and May 2001.

Argos was fined £17.28 million, reflecting its higher turnover, and Littlewoods £5.37 million.

Hasbro faced a £15.5 million fine for its involvement but escaped with no penalty on this occasion because it "blew the whistle" on Argos and Littlewoods, the OFT said.

Last November, however, Hasbro was fined £4.95 million by the OFT for preventing 10 distributors of its products selling them on below its list price.

This was reduced from a potential £9 million fine because it agreed to co-operate.

According to the OFT, Argos and Littlewoods, through its Index catalogue shop division, agreed not to sell Hasbro products below set prices.

Among the toys and games involved were Action Man, Monopoly, Tweenies, Pictionary, Mouse Trap, Cluedo, Kerplunk, and Star Wars merchandise.

Despite the size of today's fines the OFT could have imposed even larger penalties of up to 10% of the company's UK turnover.

Littlewood's turnover for the 12 months to April last year was £1.95 billion, while for Argos it was £2.7 billion, the OFT said.

John Vickers, director general of fair trading, said: "This case shows how leniency arrangements help uncover price-fixing agreements, which distort competition and keep prices artificially high.

"Price-fixing is a serious breach of the Competition Act as the fines imposed in this case reflect."

Argos said it would launch a legal challenge to what it described as the OFT's "wholly unfounded and unjustified" ruling.

Kate Swann, managing director of Argos, said: "We reject this ruling in the strongest terms and have instructed lawyers to launch an immediate appeal.

"We completely refute any suggestion that Argos has been involved in price fixing or anti–competitive activity.

"We are extremely surprised that the OFT is prepared to base its case on contradictory and unreliable evidence from Hasbro."