Manchester Utd home shirt prices  : JJB Sports £39.00,JD Sports £39.99,SportsDirect £35.49,Prices correct on 3 October 2007

Manufacturers of replica football shirts have been taking steps to discourage supermarkets from stocking their products, a BBC investigation has discovered. Nike, which makes shirts for the likes of Manchester United, Arsenal and Celtic, has a long list of criteria that retailers wanting to stock its products must meet.

BBC News has obtained a copy of Nike's 12-point document, which - among other stipulations - gives Nike the right to approve fixtures and fittings and to have its products displayed in areas "which are distinctly separate and differentiated from fixtures displaying different types of products".

The retailer also has to appoint "a sufficient number of staff with knowledge of the relevant Nike product to service the consumer in a professional manner".

Such criteria make it difficult for supermarkets to stock the kits because, for example, they would find it difficult to avoid putting them near other kinds of product - such as baked beans or even other types of clothes.

Paul Crier, general manager for toys and sporting goods at Asda, says it is not just Nike that has used such criteria.

"In the past, the likes of Umbro, Nike, Adidas, Reebok, did not want to sell to us direct so they did everything they could not to sell to us on a direct basis," he told BBC News.

Umbro, Nike, Adidas and Reebok (which is owned by Adidas) make the kit for 15 of the 20 English Premier League clubs between them, as well as four of the 12 Scottish Premier League teams and international shirts for England, Northern Ireland and Republic of Ireland.

Luxury products

Some manufacturers are allowed to use such restrictions, which are known as selected distribution networks.

A good example would be a company that makes complicated hi-fi equipment, which might require qualified staff to be on hand to deal with customers' questions.

Luxury products such as expensive perfumes are also allowed to impose such rules.

"Selective distribution is designed to cover high-value or complex products where restrictions will ultimately benefit consumers," says Eddie Powell, an intellectual property partner at the law firm Fladgate Fielder.

"I would be surprised if replica football kit fell into this description."

Justin King, chief executive of Sainsbury's, says manufacturers might have another reason for wishing to control which retailers stock their products.

"(Some) would argue - and sometimes there's been evidence - that the real reason is not to control where it's sold but to ensure it's only sold in places that will stick to retail pricing," he told BBC News.

"And clearly the latter is illegal in UK law, and it's illegal in European law.

"Manufacturers and distributors of products are not allowed to control the retail price that that product is sold at."

For its part, Nike defended its policy.

"Nike markets its products in the UK in accordance with a retailer distribution policy, ensuring that the retail environment for the sale of Nike products complies with certain minimum quality standards, so as to enable the customer to make purchases in an appropriate retail environment," it said in a statement.

"Retailers meeting the relevant minimum standards can purchase the relevant Nike products, including football shirts."

In 2003, the OFT fined a number of companies - including JJB Sports, JD Sports and Sports Soccer (now trading as Sports World or SportsDirect), Umbro, Manchester United and the FA - for fixing the prices of products such as the England shirt and Manchester United shirt.

Price-fixing

The price at which football shirts are sold has been subject to a recent investigation by the Office of Fair Trading (OFT).

In 2003, the OFT fined a number of companies - including JJB Sports, JD Sports and Sports Soccer (now trading as Sports World or SportsDirect), Umbro, Manchester United and the FA - for fixing the prices of products such as the England shirt and Manchester United shirt.

At the time, the OFT found that retailers were charging just under £40 for the Manchester United home shirt in adult size with short sleeves.

Visits to some of those retailers earlier in October demonstrated that they were still charging that price for the shirt.

The exception was SportsDirect, which had cut the price slightly - although it was difficult to find Premier League shirts in stock.

"They do seem an outrageous price compared with what they cost the club to buy (for retailing to its supporters)," said Steven Powell, director of policy and campaigns for the Football Supporters' Federation.

"It's got to be an incredibly high mark-up."

No change?

At the time of the OFT report, its chairman John Vickers said: "Since we launched our investigation the prices of replica football shirts have fallen and consumers can now shop around and get a better price."

There have indeed been occasional special offers, including big discounts on England shirts in the run-up to the last World Cup.

But on the whole, the price of replica shirts has remained stubbornly unchanged, as has the number of places on the High Street where they can be bought.

Asda, Sainsbury's and Tesco have occasionally managed to get some football shirts in stock, but they have always had to use so-called grey market routes - which involve buying from a middle-man, usually elsewhere in Europe - rather than buying directly from the manufacturers.

But the tradition of kit suppliers not dealing directly with supermarkets has just been broken.

Asda will shortly announce that it has done a deal with Diadora, which makes Scotland international shirts, to sell the kit in its Scottish stores.

Asda also said it planned to approach Nike, Adidas and Umbro and ask them if they would be prepared to supply the supermarket chain in the future.

"It's hoped that our Diadora deal will mean other big brands will start to supply us as well," said Asda's Paul Crier.

Effective monopoly

The market for football shirts is in many ways unlike that for any other product.

Manufacturers such as Nike, Umbro, Adidas and Reebok pay large sums to football clubs for the licence to make replica kit.

They then manufacture and distribute them, including to the clubs, which sell them in their own shops.

But each licence-holder is effectively a monopolist because there are no substitutes for the product. After all, nothing is going to persuade a supporter looking for an Arsenal shirt that a Chelsea one will do instead - even if it proved to be much cheaper.

That is one of the reasons why competition authorities tend to be sensitive about the way they are priced.

Umbro, Adidas, JD Sports and SportsDirect all declined to comment.

Colin Russell, head of replica shirt sales at JJB, said: "We price all replica shirts as competitively as possible and of all our product ranges, replica shirts provide JJB with one of the lowest margins across the business."

http://news.bbc.co.uk/1/hi/business/7028248.stm

 

 

 

 

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Comments (4)

  1. fsc

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  1. fsc
  1. fsc

8) america

 
  1. fsc

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