GUS Plc’s Argos store chain and losely held Littlewoods Plc were fined a record $36.1 million by antitrust regulators for fixing prices of toys and games in Britain with Hasbro Inc. Both plan to appeal.
Argos, Britain’s largest toy retailer, was fined 17.3 millionpounds and Littlewoods 5.4 million pounds. Hasbro escaped a potential 15.6 million-pound penalty for providing evidence that initiated the investigation and cooperating, Graeme Myles, a spokesman for the Office of Fair Trading, said in an interview.
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Retailers and manufacturers colluded to fix prices of board games such as Monopoly, Action Man figures and Tweenies licensed toys, Myles said. The investigation began in March 2001.
“It’s certainly not good news, but it’s relatively small in the scheme of things,” said Iain McDonald, an analyst for Numis Securities who has an “add” recommendation on GUS. He said the fine represented about 0.6 percent of Argos’s U.K. revenue.
“Prices were fixed at Hasbro’s recommended prices,” Mylessaid.
Manufacturers may only recommend retail selling prices, and they cannot be mandated, he said.
Argos and Littlewoods criticized the regulator’s decision.
“We reject this ruling in the strongest terms and have instructed lawyers to launch an immediate appeal,” Kate Swann,managing director of Argos, said in a Regulatory News Service
statement. “We completely refute any suggestion that Argos has een involved in price fixing or anti-competitive activity.”
Littlewoods said it was disappointed by the fine. “The OFT has failed to produce any convincing evidence that prices were ixed and Littlewoods’ own investigation has clearly established that its employees have not been involved in any infringement of
competition law,” it said in an e-mailed statement.
The OFT may fine companies as much as 10 percent of their U.K. sales for three years for breaches of The Competition Act. Hasbro, the world’s second-largest toymaker, was fined 4.95 million pounds in November for telling 10 distributors they couldn’t sell toys below Hasbro’s list price without permission.
Bloomberg News
