JD Sports and Elite Sports, along with Rangers Football Club, breached competition law by fixing the prices of certain Rangers-branded clothing to keep them high at the expense of fans, the UK competition watchdog has found.
The Competition and Markets Authority (CMA), which has been investigating the case since December 2020, said sports retailers Elite and JD fixed retail prices for a number of branded replica kits Rangers and other clothing products from September 2018 to at least July 2019. .
Rangers FC also participated in the alleged collusion, fixing the retail price of replica adult short-sleeved home shirts from September 2018 until at least mid-November this year. The three companies reportedly colluded to prevent JD from undercutting the shirt’s retail price on Elite Gers’ online store, the watchdog said.
If its tentative findings are confirmed, companies can expect fines.
Michael Grenfell, executive director of enforcement at the CMA, said: “We don’t hesitate to take action when we are concerned that companies are working together to keep costs down.
“Football fans are well known for their loyalty to their teams. We’re concerned that in this case, Elite, JD Sports and, to some extent, Rangers have colluded to keep prices high, so both retailers can pocket more money for themselves at the expense of fans.
JD said it would review the CMA’s findings with its advisers and make a provision of £2million in its results for the year to January 29, reflecting its estimate of the potential penalty, including costs of righteousness.
At the time, Elite were the manufacturer of Rangers branded clothing and also sold the products directly through their Gers Online store and later in physical stores in Glasgow and Belfast. The only major UK-wide retailer selling these products at the time was JD Sports.
The AMC alleges that at the start of the 2018-19 football season, Rangers FC became concerned that JD was selling the replica Rangers top at a lower price than Elite, considered to be the commercial partner. of the club at the time. The three parties have agreed that JD will increase the price of the Rangers adult short sleeve home replica by nearly 10% from £55 to £60 to bring it in line with Elite prices.
The AMC is also concerned that Elite and JD – without Rangers’ involvement – have colluded to fix retail prices for Rangers-branded apparel, including training wear and replica kit, over a longer period of time. . This included aligning the level and timing of discounts towards the end of the football season in 2019, to protect their profit margins at the expense of fans.
Elite and JD sought leniency during the CMA investigation and confessed to cartel activities, the watchdog said.
If they continue to cooperate with the investigation, each will receive a reduction in any financial penalties the CMA may impose. Any company found guilty of breaching the prohibitions of the Competition Act 1998 can be fined up to 10% of the group’s annual worldwide turnover. JD Sports had a turnover of £6.2 billion in 2021.
Companies have the opportunity to make representations to the CMA before it makes a final decision.