Hasbro Inc, the world's second-largest toymaker, was fined 4.95 million euro (US$7.7 million) by British regulators for fixing prices in the UK.
The maker of Mr. Potato Head and GI Joe broke British competition law when it told 10 distributors they couldn't sell toys and games below Hasbro's list price without permission, the UK's Office of Fair Trading said. The ruling will be appealed, Pawtucket, Rhode Island-based Hasbro said in a statement.
Hasbro expects fourth-quarter expenses of as much as US$20.9 million. The company had already taken a charge to last year's earnings of 160,000 euro to cover expected costs. The agency is conducting a second inquiry into Hasbro's agreements. A final decision is expected in several months, the company said.
"We are surprised and disappointed at the level of the fine imposed by the OFT," Chief Executive Alan Hassenfeld said in the statement. "The activities cited by the OFT occurred over a very short period of time and through a limited number of wholesale distributors."
Hasbro had expected a fine of between US$236,000 and US$38.3 million, the company said. The fine was first set at 9 million euro, the UK regulator's largest, and reduced because Hasbro cooperated in the probe, the regulator said.
Company spokesman Wayne Charness didn't immediately return phone calls to his office and cellular phone. In May, the Office of Fair Trading made a preliminary finding that Hasbro's pricing agreement with some UK retailers was unlawful and a final decision is expected in the next several months, the company said in the statement.
Shares of Pawtucket, Rhode Island-based Hasbro fell US$0.26 to US$12.82 at 3:41pm in New York Stock Exchange composite trading Friday. They have declined 21 percent this year.