CMA tentatively finds unlawful pricing of Rangers FC merchandise
If confirmed, the companies involved can expect fines.
The provisional conclusions are:
- Elite Sports and JD Sports have fixed retail prices for a number of Rangers branded replica kits and other apparel products from September 2018 through at least July 2019.
- Rangers FC also took part in the alleged collusion, but only to the extent that they fixed the retail price of replica short-sleeved adult home shirts from September 2018 until at least mid-November 2018. The 3 parties would have agreed to prevent JD Sports from reducing retail. price of the jersey on the Elite Gers Online store.
At the time, Elite were the manufacturer of Rangers branded clothing and also sold Rangers branded goods directly through 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 Competition and Markets Authority (CMA) alleges that Rangers FC became concerned that at the start of the 2018-19 football season JD Sports were selling the replica Rangers top for less than that of Elite, who was seen at the time as a “business partner” of the club. This resulted in an agreement between the 3 parties that JD Sports would raise the retail price of the replica Rangers adult short sleeve home shirt by almost 10% from £55 to £60 in order to align with the prices charged by Elite on Gers Online.
The AMC is also concerned that Elite and JD Sports – without Rangers’ involvement – have colluded to fix retail prices for Rangers-branded apparel, including training wear and replicas, over a longer period. This included aligning the level and timing of discounts towards the end of the football season in 2019, to avoid competition between them and protect their profit margins at the expense of fans.
Elite and JD Sports requested leniency during the CMA investigation and confessed to cartel activity. Provided they continue to cooperate with the investigation, each will receive a reduction of any financial penalty the CMA may decide to 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.
Michael Grenfell, Executive Director of Law Enforcement at CMA, said:
We do not 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 the prices high, so that the 2 retailers can pocket more money for themselves at the expense of the fans.
These are the CMA’s interim findings and affected companies now have the opportunity to make representations to the CMA before it makes a final decision.
More information can be found on the case page: Suspected anti-competitive behavior in relation to the price of the Rangers FC branded replica football kit.
Notes to Editors:
For media enquiries, contact the CMA Press Office on 020 3738 6460 or [email protected]
The prohibition in Chapter I of the Competition Act 1998 prohibits agreements and concerted practices between undertakings which have as their object or effect the prevention, restriction or distortion of competition in the UK.
The Statement of Objections is addressed to the following parties: Elite Sports Group Limited and its parent company Elite Corporation Limited; JD Sports Fashion Plc; and The Rangers Football Club Limited and its parent company Rangers International Football Club Plc.
A Statement of Objections informs the parties of a proposed infringement decision under the Competition Act 1998. This is only a provisional decision and does not necessarily lead to an infringement decision. The parties have the opportunity to submit written and oral observations on the points set out in the statement of objections. Any such representation will be reviewed by CMA before a final decision is made. The final decision will be made by a case adjudication panel, which is separate from the investigation team and was not involved in the decision to issue the Statement of Objections.
The statement of objections will not be published. However, any person who, in the opinion of the CMA, is directly and materially affected by the result of the CMA’s investigation and likely to materially assist the CMA in its investigation may request a non-confidential version of the communication of the grievances by contacting the CMA.
Under the CMA’s Leniency Policy, a company that has been involved in a cartel may be granted immunity from sanctions or a significant reduction in sanction in exchange for reporting cartel activity. and assistance to the CMA in its investigation. Persons involved in cartel activities may also, in certain defined circumstances, be granted immunity from criminal prosecution for the cartel offense under the Companies Act 2002 and from the disqualification proceedings of the competition. The CMA also operates a rewards policy under which it can pay a financial reward of up to £100,000 in exchange for information that helps it identify and take action against cartels. For more information on the CMA’s leniency and informant reward policies, go to Leniency and Rewards.
Anyone with information about a cartel is urged to call the CMA Cartel Hotline on 020 3738 6888 or email [email protected]