LONDON - The U.K. Office of Fair Trade (OFT) has fined two dozen tobacco manufacturers and retailers, including Imperial Tobacco Group Plc. and Gallaher Group Ltd., $346 million for price fixing between 2001 and 2003, Bloomberg News reports. This is the biggest fine of this type by antitrust regulators.

Imperial, which makes the Davidoff, JPS and West brands, was penalized 112.3 million pounds, the highest amount of all the offenders. Gallaher, part of Japan Tobacco Inc., received a 50.4 million pounds.

Other companies receiving a fine include Wal-Mart Stores Inc.??s Asda unit (14.2 million pounds) and The Co-operative Group (14.1 million pounds). The coordination of cigarette prices prohibited retailers from pricing cigarettes on their own, OFT said.

"Practices such as these, which restrict the ability of retailers to set their resale prices for competing brands independently, are unlawful," said OFT Senior Director Simon Williams in a statement. "They can lead to reduced competition and ultimately disadvantage consumers."

Imperial said it did not break any laws and that it would appeal the fine to the Competition Appeal Tribunal. Japan Tobacco has a positive view of the fine only in the sense that something has been formally released, said its spokeswoman Yuka Sugimoto.

William Morrison Supermarkets Plc will challenge its fines (2.45 million pounds, plus Safeway??s 10.9 million pounds, which it acquired), alleging that the OFT??s position was "illogical and without foundation...The practices to which the OFT refers were intended to reduce the retail prices charged to consumers, and the OFT has itself acknowledged that its case is based on a novel interpretation of the law."