JD Sports is facing a potential fine after the CMA provisionally found that the group, alongside Elite Sports and Rangers Football Club, broke competition law by fixing the retail price of Rangers FC merchandise.
The regulator alleged that JD Sports and Elite Sports fixed the prices of a “number” of Rangers-branded replica kits between September 2018 and July 2019, with all three groups colluding to stop JD Sports undercutting the price of the shirt on Elite’s Gers Online store.
The CMA alleges that Rangers FC “became concerned” about the fact that JD Sports was selling the Rangers replica top at a lower price than Elite, which was seen at the time as the club’s retail partner.
This reportedly 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 Elite’s prices.
The CMA said it is also concerned that Elite and JD Sports, 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 avoid competition between them and protect their profit margins “at the expense of fans”.
Both JD Sports and Elite applied for leniency during the CMA’s investigation and “confessed to cartel activity”. The CMA said that “provided they continue to cooperate with the investigation, each will receive a reduction on any financial penalties the CMA may decide to impose”.
Michael Grenfell, 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 2 retailers could pocket more money for themselves at the expense of fans.”
JD Sports said in a statement: “The CMA’s findings are, at this stage, only provisional and the group will now review them with its advisers.
“The CMA will consider any representations that are made before issuing its final findings. As the CMA has noted, JD has cooperated fully with the CMA and, provided this continues, JD will receive a reduction on any financial penalties that the CMA may decide to impose.”
In addition, the group said it intends to recognise a £2m provision in its results for the full-year ended 29 January 2022, representing its best estimate of the liability payable in respect of the development, including associated legal costs.