JD Sports and Elite Sports, along with Rangers Football Club, broke competition law by fixing prices on some Rangers-branded apparel to keep them high at the expense of fans, Britain’s competition watchdog has found.
The Competition and Markets Authority (CMA), which has been investigating the matter since December 2020, said sports retailers Elite and JD had set the retail prices for a number of Rangers-branded replica kits and other apparel since September 2018 to at least July 2019. .
Rangers FC also participated in the alleged collusion, fixing the retail price of adult short-sleeved replica jerseys from September 2018 until at least mid-November of that year. The three companies allegedly colluded to prevent JD from undercutting the retail price of the jersey at Elite’s Gers Online store, the watchdog said.
If their interim findings are confirmed, the companies can expect to face fines.
Michael Grenfell, executive director of enforcement for the CMA, said: “We don’t hesitate to take action when we are concerned that companies may be working together to keep costs up.
“Football fans are well known for their loyalty to their teams. We are concerned that, in this case, Elite, JD Sports and, to some extent, Rangers, may have colluded to keep prices high so that the two retailers could pocket more money at the expense of fans.”
JD said it would review the CMA’s findings with its advisers and make a £2m provision in its results for the year to January 29, reflecting its estimate of the potential penalty, including legal costs.
At the time, Elite was the manufacturer of Rangers-branded clothing and also sold the products direct through its Gers Online store and later in brick-and-mortar stores in Glasgow and Belfast. The only major UK retailer selling such products at the time was JD Sports.
The CMA alleges that at the start of the 2018-19 football season, Rangers FC were concerned that JD was selling the Rangers replica shirt at a lower price than Elite, considered the club’s retail partner at the time. The three parties agreed that JD would increase the price of the Rangers Adult Short Sleeve Home Replica Jersey by nearly 10%, from £55 to £60, to bring it in line with the prices charged by Elite.
The CMA is also concerned that Elite and JD, without the involvement of the Rangers, colluded to fix the retail prices of Rangers-branded apparel, including training apparel and replica gear, over a longer period. 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.
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Elite and JD applied for leniency during the CMA investigation and confessed to cartel activity, the watchdog said.
If they continue to cooperate with the investigation, they will each receive a reduction in any financial penalties that may be imposed by the CMA. Any company found to have breached the prohibitions of the Competition Act 1998 can be fined up to 10% of the group’s annual worldwide turnover. JD Sports had revenue of £6.2bn in 2021.
Companies have the opportunity to make representations to the CMA before it reaches a final decision.
Source: www.theguardian.com