OFT decision quashed

OFFICE OF FAIR TRADING (OFT) DECISION AGAINST IMPERIAL TOBACCO IS QUASHED

We are pleased that the decision to fine Imperial Tobacco £112.3 million for allegedly restricting competition has today been quashed.

We take compliance with competition law very seriously and have always rejected the OFT's suggestion that we acted anti-competitively or in any way contrary to the interests of consumers.

The OFT's case against Imperial collapsed part way through a Competition Appeal Tribunal hearing. We will now be applying to recover our legal costs.

The Company said:

"The hearing by the Competition Appeal Tribunal was the first time since the OFT's investigation began more than eight years ago that we were able to have its allegations independently reviewed.

"Under this independent scrutiny it became clear that the case the OFT was seeking to establish had no basis in fact, law or economics.

"We have consistently believed that this ought to have been apparent to the OFT a long time before now and that we should not have been forced into incurring considerable legal costs and management time defending ourselves in these circumstances."

Notes to editors

The OFT's investigation began in 2003 and related to certain promotional arrangements between Imperial Tobacco and multiple retailers from 1 March 2000 to 15 August 2003.

Imperial Tobacco co-operated fully with the OFT throughout the investigation and categorically denied that these promotional arrangements had the purpose or the effect of restricting competition.

Far from being anti-competitive, these arrangements were pro-competitive and to the benefit of consumers. Retailers remained free to set their own prices.

In April 2010 the OFT announced its decision to fine Imperial Tobacco and in June 2010 Imperial Tobacco appealed the decision to the Competition Appeal Tribunal.

Enquiries

Simon Evans (Group Press Officer)Telephone: +44 (0) 117 933 7375

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Grant Edmunds (Investor Relations Manager)Telephone: +44 (0) 117 933 7117