By John Considine
Yesterday, June 8th, marked the fourteenth anniversary of one of the more infamous meetings in competition (antitrust) law. On that day, some of the key players in the replica shirt business had a short but eventful meeting. The meeting forms part of the facts in an Office of Fair Trading investigation (here). The meeting has become famous because of the alleged interaction between Dave Whelan (of JJB & Wigan Athletic fame) and Mike Ashley (of Sports Soccer & Newcastle United fame). The meeting was arranged to dampen the price war in the sale of replica soccer shirts. Dave Whelan arrived at the meeting by helicopter. On disembarking, he got the meeting off to a bad start when he apparently thought that Mike Ashley was the gardener (see paragraph 188 of the OFT Decision). Things did not get any better when during the meeting Whelan was alleged to have said to Ashley, "there's a club you know in the north, son, and you're not part of it". Two months later, Mike Ashley decided to blow the whistle on the price-fixing cartel and, therefore, sparked the OFT investigation.
It seems that in the months prior to the infamous June 8th meeting, Sports Soccer's strategy of discounting replica kit was causing some unrest amongst the retailers. Paragraphs 157 and 158 details how JJB complained to Umbro (the manufacturer of the replica kit) about such practices and threaten to withdraw orders unless Umbro sorted it out. Umbro was also coming under pressure from Manchester United to deal with the issue (paragraph 172).
Of particular concern in May/June 2000 was the retail price of the England shirt. In March, Sports Soccer were selling the shirt at £28. This was over £10 less than most high-street retailers. In his witness statement, Mr. Chris Ronnie of Umbro explained how, at a meeting in April, agreement was reached with Sports Soccer to retail the England shirt at its recommended retail price of £39.99. Sports Soccer continued to discount the England replica shorts and socks. Mr Ronnie spoke to Mike Ashley in an attempt to get him to stop this discounting. Initially, Ashley refused. Then Mr Ronnie stopped a delivery to Sports Soccer. After this delivery was stopped, Sports Soccer sold socks and shorts at the recommended retail price.
Is it any wonder that Mike Ashley was motivated to blow the whistle on the price-fixing?
On June 20th, England were eliminated from the Euro 2000 tournament. The following day Sports Soccer discounted the England replica shirt to £20. David Butler has written on this blog about the dissatisfaction surrounding the price of the England shirt for this year's World Cup (here). If England are eliminated from this year's competition then similar, or greater, discounting will follow.
Of particular concern in May/June 2000 was the retail price of the England shirt. In March, Sports Soccer were selling the shirt at £28. This was over £10 less than most high-street retailers. In his witness statement, Mr. Chris Ronnie of Umbro explained how, at a meeting in April, agreement was reached with Sports Soccer to retail the England shirt at its recommended retail price of £39.99. Sports Soccer continued to discount the England replica shorts and socks. Mr Ronnie spoke to Mike Ashley in an attempt to get him to stop this discounting. Initially, Ashley refused. Then Mr Ronnie stopped a delivery to Sports Soccer. After this delivery was stopped, Sports Soccer sold socks and shorts at the recommended retail price.
Is it any wonder that Mike Ashley was motivated to blow the whistle on the price-fixing?
On June 20th, England were eliminated from the Euro 2000 tournament. The following day Sports Soccer discounted the England replica shirt to £20. David Butler has written on this blog about the dissatisfaction surrounding the price of the England shirt for this year's World Cup (here). If England are eliminated from this year's competition then similar, or greater, discounting will follow.
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