CMA verdict

JD Sports, Elite and Rangers ‘broke law’ on kit pricing

JD Spiorts in St James
JD Sports was part of collusion (pic: Terry Murden)

Rangers Football Club, the retailer JD Sports and kit manufacturer Elite Sports broke competition laws by fixing the prices of some Rangers-branded products from September 2018 to July 2019, says the Competition and Markets Authority (CMA).

The CMA, which has been investigating the matter since December 2020, said all three companies allegedly colluded to stop JD undercutting the retail price of the shirt on Elite’s Gers Online store.

The regulator said: “The CMA alleges that Rangers FC became concerned about the fact that, at the start of the 2018-19 football season, JD Sports was selling the Rangers replica top at a lower price than Elite…

“This resulted in an understanding between the three parties that JD Sports would increase its retail price of the Rangers adult short-sleeved home replica shirt by nearly 10%… to bring it in line with the prices being charged by Elite on Gers Online.”

If its provisional findings are confirmed, the companies can expect to face fines. JD has set aside £2m for a possible fine.

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. “As the CMA has noted, JD has co-operated fully with the CMA and, provided this continues, JD will receive a reduction on any financial penalties that the CMA may decide to impose,” it said in response to the CMA’s findings.

The company said it will make a provision of £2m in its results for the 52 weeks to 29 January, reflecting its estimate of the potential penalty, including legal costs. It expects to release its final results for this period, incorporating this provision, shortly.

Rangers confirmed it had received the CMA’s Statement of Objections (SO), adding: “ The SO represents the CMA’s provisional view only. It is not a finding that Rangers has broken the law and does not mean that the CMA will issue a final decision or impose a fine on [the club].

“Rangers is committed to operating its business in full compliance with all laws, including competition law, and treats this matter very seriously. As such, Rangers will review in detail the CMA’s preliminary findings and will be submitting its response … in due course.

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“Rangers notes that it has cooperated with the CMA since the investigation was initiated and will continue to do so.”

AJ Bell investment director Russ Mould, said: “Sportswear retailer JD Sports could well do without the disruption of another tussle with the Competition and Markets Authority.

“Fresh from the probe into its ill-fated takeover of Footasylum, which was a contributory factor in the departure of long-standing boss Peter Cowgill, the regulator has put the company on the back foot over fixing the price of sales of Rangers FC replica kit.

“The size of the provision to cover any resulting liabilities is modest but, nonetheless, this is an unwelcome distraction as the business looks to reset in the wake of Cowgill’s exit.”

… more follows

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