// JD Sports is facing a fine from the competition watchdog after it was found to engage in “cartel activity”
// The CMA found evidence of illegal price fixing of Rangers Football Club merchandise
JD Sports is facing a large fine after the CMA provisionally found it had engaged in “cartel activity” by fixing the retail price of football shirts.
The CMA has provisionally found evidence of illegal price fixing of Rangers Football Club merchandise that lasted between September 2018 and July 2019.
The competition watchdog said JD Sports colluded with Rangers and Elite Sports – the then-manufacturer Rangers-branded clothing – to fix the retail price of adult replica home shirts.
Rangers “became concerned” that JD was selling the replica shirts at a lower price than Elite.
The three parties are said to have agreed that JD would raise its price almost 10%, from £55 to £60, to bring it in line with the prices being charged by Elite on the Rangers website.
The CMA’s investigation found that JD and Elite fixed the retail prices of “a number of Rangers-branded replica kits and other clothing products” between September 2018 until at least July 2019, without the involvement or knowledge of the football club.
The watchdog alleged this included “aligning the level and timing of discounts” towards the end of the 2018/19 football season “to avoid competition” and “protect their profit margins at the expense of fans”.
The CMA said JD and Elite will receive reduced financial penalties “provided they continue to cooperate with the investigation”.
Any business found to be in breach of the Competition Act 1998 can be fined as much as 10% of annual turnover. That would amount to a penalty of more than £600 million for JD, which raked in £6.17 billion in sales during the year to January 30, 2021.
But JD said it only “intends to recognise a provision of approximately £2 million” in its 2021/22 results, which is its “best estimate of the liability payable”, including legal costs.
JD said it is currently reviewing the findings with its advisers.
CMA executive director of enforcement Michael Grenfell 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.”
This is not the first time JD Sports has found itself foul of the CMA. In February, the CMA hit JD Sports with a fine £4.3m following a secret meeting between JD executive chairman Peter Cowgill and Footasylum CEO, and former JD chief executive, Barry Bown.
The CMA was investigating JD’s potential acquisition of Footasylum at the time and said the clandestine meeting in a car park, where commercially sensitive information was shared, breached its rules.