Rangers colluded in ‘illegal price-fixing’ of home shirts as JD Sports facing ‘£2million fine’
RANGERS FC fixed the retail prices of their home replica kit according to a provisional finding by the CMA.
The Competition and Markets Authority's (CMA) say the Ibrox club allegedly colluded to fix the price of the main adult home replica shirt over a period in 2018.
Kit manufacturer Elite Sports and JD Sports were also provisionally found to have fixed the retail prices of a number of Rangers-branded replica kits and clothing products from 2018 to 2019.
They will all face hefty fines if they are determined to have broken the law.
At this stage there has been no finding that the law has been broken.
However, JD Sports have already set aside £2million in their financial statements ahead of any potential penalties.
The CMA confirmed that JD Sports and Elite have already "confessed to cartel activity" and "applied for leniency" in a bid to have their fines reduced.
The UK competition watchdog decided to proceed with an investigation into the three groups over the price of replica football kits in October last year.
It is alleged that Rangers took part in the collusion by fixing the price of the adult home replica short sleeve kits from September 2018 until mid-November 2018.
It is also alleged that Elite Sports and JD Sports fixed the price of certain kits and other items of clothing from September 2018 through to at least July 2019.
According to the CMA, all three are alleged to have conspired to stop JD Sports from selling the replica shirts cheaper than on Elite’s Gers Online store.
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The CMA claim that at the start of the 2018/19 season "Rangers became concerned" that JD Sports was selling the Rangers replica top at a lower price than Elite.
It's alleged the three parties then reached "an understanding" that JD Sports would increase the price of a replica shirt from £55 to £60 to bring it inline with the prices charged on Gers Online by Elite.
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."
They added that "any business found to have infringed the prohibitions in the Competition Act 1998 can be fined up to 10 per cent of its annual worldwide group turnover."
JD Sports released a statement to the Scottish Sun which read: "JD Sports Fashion Plc ('JD' or 'Group') notes the press release issued by the CMA earlier today with regards to its ongoing investigation into the suspected breaches of competition law by the following entities and their affiliates: The Rangers Football Club Limited, LBJ Sports Apparel Limited (trading as Elite Sports) and JD Sports Fashion Plc.
"JD can confirm that it has, today, also received a Provisional Statement of Objections and a Draft Penalty Notice from the CMA. 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 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.
"Based on the information available to it at this time, the Group intends to recognise a provision of approximately £2 million in its financial statements for the 52 weeks to 29 January 2022 representing the Group’s best estimate of the liability payable in respect of this matter, including associated legal costs.
"The Group expects to release its final results for this period, incorporating this provision, shortly."
Rangers FC said it "treats this matter very seriously".
It added: "Rangers will review in detail the CMA's preliminary findings and will be submitting its response to the CMA in due course."
Elite Sports has also been approached for comment.
The investigation began in December 2020.
The Rangers Hummel strip sold for £60 for the top at the time, and the full kit was selling for £85.
The Ibrox side received almost £2.5million in unpaid replica shirt sales from Hummel and their brand partner back in January.
Rangers won the latest round of a legal fight with Mike Ashley's Sports Direct over the terms of an injunction.
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The Gers agreed a lucrative multi-year deal with Liverpool-based firm Castore to be their new kit supplier and retail partner during the summer of 2020, promising it would be a "clean slate”.
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