REG - Competition and Mkts - CMA update: Elite/JD Sports/Rangers investigation

JD Sports FashionAnnouncement

07/06/2022 08:30

For best results when printing this announcement, please click on link below:
http://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20220607:nRSG9624Na&default-theme=true

RNS Number : 9624N  Competition and Markets Authority  07 June 2022

 

CMA provisionally finds illegal price-fixing of Rangers FC merchandise

The CMA has provisionally found that Elite Sports, JD Sports, and Rangers
Football Club broke competition law by fixing the retail prices of certain
Rangers-branded clothing products.

If confirmed, the companies involved can expect to face fines.

The provisional findings are:

·    Elite Sports and JD Sports fixed the retail prices of a number of
Rangers-branded replica kits and other clothing products from September 2018
until at least July 2019.

·    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 3 parties allegedly
colluded to stop JD Sports undercutting the retail price of the shirt on
Elite's Gers Online store.

At the time, Elite was the manufacturer of Rangers-branded clothing and also
sold Rangers-branded products directly through Gers Online Store and later in
bricks-and-mortar shops in Glasgow and Belfast. The only UK-wide major
retailer selling those products at the time was JD Sports.

The Competition and Markets Authority (CMA) alleges that Rangers FC became
concerned about the fact that, at the start of the 2018-19 football season, 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 resulted in an
understanding between the 3 parties that JD Sports would increase its retail
price of the Rangers adult short-sleeved home replica shirt by nearly 10%,
from £55 to £60, to bring it in line with the prices being charged by Elite
on Gers Online.

The CMA 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.

Elite and JD Sports applied for leniency during the CMA's investigation and
confessed to cartel activity. Provided they continue to cooperate with the
investigation, each will receive a reduction on any financial penalties the
CMA may decide to impose. Any business found to have infringed the
prohibitions in the Competition Act 1998 can be fined up to 10% of its annual
worldwide group turnover.

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."

These are the CMA's provisional findings and the companies involved now have
the chance to make representations to the CMA before it reaches a final
decision.

For more information, visit the case page
(https://www.gov.uk/cma-cases/suspected-anti-competitive-behaviour-in-relation-to-the-pricing-of-rangers-fc-branded-replica-football-kit)
.

 

Notes to editors:

1.   For media enquiries, contact the CMA press office on 020 3738 6460 or
press@cma.gov.uk.

2.   The Chapter I prohibition in the Competition Act 1998 prohibits
agreements and concerted practices between businesses which have as their
object or effect the prevention, restriction or distortion of competition
within the UK.

3.   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.

4.    A statement of objections gives parties notice of a proposed
infringement decision under the Competition Act 1998. It is a provisional
decision only and does not necessarily lead to an infringement decision.
Parties have the opportunity to make written and oral representations on the
matters set out in the statement of objections. Any such representations will
be considered by the CMA before a final decision is made. The final decision
will be taken by a case decision group, which is separate from the
investigation team and was not involved in the decision to issue the statement
of objections.

5.   The statement of objections will not be published. However, any person
who in the CMA's view is directly and materially affected by the outcome of
the CMA's investigation and is likely materially to assist the CMA in its
investigation may request a non-confidential version of the statement of
objections by contacting the CMA.

6.   Under the CMA's leniency policy, a business that has been involved in a
cartel may be granted immunity from penalties or a significant reduction in
penalty in return for reporting cartel activity and assisting the CMA with its
investigation. Individuals involved in cartel activity may also in certain
defined circumstances be granted immunity from prosecution for the cartel
offence under the Enterprise Act 2002 and from competition disqualification
proceedings. The CMA also operates a rewards policy under which it may pay a
financial reward of up to £100,000 in return for information which helps it
to identify and take action against cartels. For more information on the CMA's
leniency and informant reward policies, go to leniency
(https://www.gov.uk/guidance/cartels-confess-and-apply-for-leniency) and
rewards
(https://www.gov.uk/government/publications/cartels-informant-rewards-policy)
.

7.   Anyone who has information about a cartel is encouraged to call the CMA
cartels hotline on 020 3738 6888 or email cartelshotline@cma.gov.uk
(mailto:cartelshotline@cma.gov.uk) .

 

 

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact
rns@lseg.com (mailto:rns@lseg.com)
 or visit
www.rns.com (http://www.rns.com/)
.

RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
.   END  IRSEAKKXEEAAEEA