JD Sports faces football shirt price-fixing fine
JD Sports Fashion has admitted to “cartel activity” by fixing the retail price of football shirts. The UK’s biggest sportswear retailer could face a big fine from the Competition and Markets Authority (CMA) after the body found evidence of illegal price fixing. It relates to Glasgow Rangers Football Club merchandise sold between September 2018 and July 2019.
The competition watchdog had alleged that JD Sports Fashion colluded with Rangers and Elite Sports – the then-manufacturer of Rangers-branded clothing – to fix the retail price of adult replica home shirts between September and November 2018. The CMA alleged that Rangers “became concerned” that JD was selling the replica shirts at a lower price than Elite.
The three parties are said to have agreed that JD would raise its price almost 10%, from £55 to £60, to bring it in line with the prices being charged by Elite on the Rangers website.
The CMA’s probe also provisionally found that JD and Elite fixed the retail prices of “a number of Rangers-branded replica kits and other clothing products” between September 2018 until at least July 2019, without the involvement or knowledge of the football club.
It also claims Rangers FC also took part in the alleged collusion but only to the extent of fixing the retail price of adult home short-sleeved replica shirts from September 2018 to at least mid-November 2018. All three parties allegedly colluded to stop JD Sports undercutting the retail price of the shirt on Elite’s Gers online store.
The watchdog alleged that this included “aligning the level and timing of discounts” towards the end of the 2018/19 football season “to avoid competition” and “protect their profit margins at the expense of fans”.
Both JD and Elite admitted to “cartel activity” and have “applied for leniency” following the investigation.
The CMA said both parties will receive reduced financial penalties “provided they continue to cooperate with the investigation”. Any business found to be in breach of the Competition Act 1998 can be fined as much as 10% of annual turnover. That would amount to a penalty of more than £600m for JD, which saw £6.17bn in sales during the year to 30 January 30 2021.
But JD Sports said it only “intends to recognise a provision of approximately £2m” in its 2021/22 results, which is its “best estimate of the liability payable”, including legal costs. JD also said it is currently reviewing the findings with its advisers.
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