JD Sports conspired with another sporting goods firm and Rangers Football Club conspired to fix prices of replica shirts so they could boost profit margins at the expense of fans, the competition watchdog has found.
In a provisional ruling, the Competition and Markets Authority said that Rangers, Elite Sports and JD Sports worked together so they could “pocket more money for themselves at the expense of fans”.
The CMA said JD and Elite fixed the retail prices of a number of Rangers kits and other clothing products from September 2018 until at least July 2019.
Rangers took part in the price fixing, between September 2018 and November of that year, the CMA said. The three companies face fines if the CMA goes on to conclude that they broke competition law.
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.”
The CMA claims that Rangers became concerned that at the start of the 2018-19 football season, JD Sports was selling replica kits at a lower price than Elite, regarded as the club’s retail partner at the time.
The three companies then colluded to raise the price of a short-sleeved home shirt by almst 10 per cent to £60.
That meant that JD was charging the same as Rangers charged in its online shop, according to the CMA.
The watchdog also alleges that Elite and JD worked together to fix the prices of other Rangers-branded clothing over a longer period, this time without involvement from Rangers.
This collusion included co-ordinating the timing and level of promotions, in order to protect the companies' profit margins, to the detriment of fans.
Elite and JD have admitted to cartel activity and asked for leniency from the CMA.
JD said it plans to take a hit of around £2m to cover any fine and legal costs in its annual results, which it will release “shortly”.
