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JD Sports and Elite Sports, along with Rangers Football Club, broke competition law by fixing the prices of some Rangers-branded clothing 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 fixed the retail prices of a number of Rangers-branded replica kits and other clothing products from September 2018 until at least July 2019.
Rangers FC also took part in the alleged collusion, by fixing the retail price of adult home short-sleeved replica shirts from September 2018 until at least mid-November of that year. All three companies allegedly colluded to stop JD undercutting the retail price of the shirt on Elite’s Gers Online store, the watchdog said.
If its provisional findings are confirmed, the companies can expect to face fines.
Michael Grenfell, the executive director of enforcement at the CMA, said: “We don’t hesitate to take action when we have concerns that companies may be working together to keep costs up.
“Football fans are well known for their loyalty towards 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 for themselves at the expense of fans.”
JD said it would review the CMA’s findings with its advisers, and will make a provision of £2m in its results for the year to 29 January, 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 directly through its Gers Online store and later in physical shops in Glasgow and Belfast. The only UK-wide big retailer selling those products at the time was JD Sports.
The CMA alleges that at the start of the 2018-19 football season, Rangers FC became concerned that JD was selling the Rangers replica top at a lower price than Elite, regarded as the club’s retail partner at the time. The three parties agreed that JD would raise its price for the Rangers adult short-sleeved home replica shirt by nearly 10%, from £55 to £60, to bring it in line with the prices being charged by Elite.
The CMA is also concerned that Elite and JD – without involvement from Rangers – colluded to fix the retail prices of Rangers-branded clothing, including training wear and replica kit, 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’s investigation and confessed to cartel activity, the watchdog said.
If they continue to cooperate with the investigation, each will receive a reduction on any financial penalties the CMA may impose. Any business found to have infringed the prohibitions in the Competition Act 1998 can be fined up to 10% of its annual worldwide group turnover. JD Sports made revenues of £6.2bn in 2021.
The companies have the chance to make representations to the CMA before it reaches a final decision.
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