U.K. Fines Hasbro Arm for Price FixingAP , Associated Press
Nov. 29, 2002 5:57 PM ET
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LONDON (AP) _ Britain's trading watchdog on Friday fined the British arm of U.S. toy manufacturer Hasbro Inc. 4.95 million pounds ($7.7 million) for preventing distributors from selling its toys and games below prices fixed by the company.
It was the largest fine imposed by the Office of Fair Trading since it gained new powers in March 2000 to crack down on anticompetitive practices.
The Office of Fair Trading found that Hasbro UK, maker of Sindy, Action Man and My Little Pony, and 10 distributors broke competition law by entering into price-fixing agreements. But it said it was not fining the distributors because it accepted that they had no choice but to accept Hasbro's terms.
Hasbro UK, which is based in west London, said it would appeal.
``We are surprised and disappointed at the level of the fine imposed by the OFT, which we believe to be disproportionate,'' said Alan G. Hassenfeld, chairman and chief executive of Pawtucket, R.I.-based Hasbro, Inc. ``The activities cited by the OFT occurred over a very short period and through a limited number of wholesale distributors. Hasbro believes that such activities had no significant effect on competitiveness within its small network of distributors or on consumers.''
Hasbro is in the process of analyzing the Office of Fair Trading's decision, the company said.
The Office of Fair Trading had initially proposed a fine of 9 million pounds ($14 million), but agreed to reduce the figure because the company cooperated with the investigation.
The Office of Fair Trading said Hasbro tried to control the market by not allowing its distributors to sell its products below the price it set. Among the well-known toys and games affected were Action Man, Monopoly, Pictionary, Twister and merchandise from the ``Star Wars'' films.
The illegal agreements were in place from early 2001 to July of that year, the OFT said.
The Office of Fair Trading has yet to make a final ruling in a separate investigation in which it found Hasbro had struck anticompetitive price-fixing agreements with retailers Argos and Littlewoods. It is still studying their submissions in the case.
On the Net:
Hasbro UK, http://www.hasbro.co.uk
Office of Fair Trading, http://www.oft.gov.uk