Manchester United caught offside by OFT for fixing prices on replica shirts

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The Independent Football

Manchester United, a leading sports kit manufacturer and eight retailers were fined a total of £18.6m yesterday after being found guilty of colluding to fix the price of replica football shirts.

After a 14-month investigation, the Office of Fair Trading (OFT) said the severity of the fines on Britain's most famous football club, the manufacturer Umbro, and several leading store chains reflected the scale of a national conspiracy to cheat consumers. Even the game's governing body, the Football Association, was found guilty of maintaining the price of England shirts by restricting supply through Britain's biggest sports retailer, JJB Sports, and its own defunct online shop.

The scandal centred on an illegal agreement to inflate the price of Umbro shirts for Manchester United, as well as for three other clubs not involved in the wrongdoing: Chelsea, Nottingham Forest and the Scottish club Celtic.

Emboldened by new powers in the Competition Act 2000, OFT investigators launched a series of early morning raids to seize incriminating documents. It was also helped by evidence from two retailers, whose assistance reduced their fines.

The OFT uncovered complex scams between spring 2001 and autumn 2002 to fix prices for several months each time a new kit was launched.

The companies paid a heavy price yesterday - JJB Sports was fined £8.3m, Allsports £1.3m and five other companies were fined between £4,000 and £197,000. The Football Association was fined £158,000. Manchester United, the reigning Premiership champions, were fined £1.6m. Umbro's fine was the second biggest at £6.4m.

The fines were the second highest in the OFT's history, after Argus and Littlewoods were fined £22.6m for fixing the price of toys.

Tom Heide, competition expert at the law firm Bristows, said: "The OFT has used competition law to get rid of rip-off Britain and make it a cheaper place to live.

"This case raises the issues because so many people are affected by the price of football kits. The ruling sends a message to boardrooms that if they get caught price-fixing they will get hammered."

He said the ruling against Manchester United showed the club, the wealthiest in Britain, was in a unique position to combine the strength of its brand with aggressive marketing.

John Vickers, OFT chairman, said: "The fines imposed reflect the seriousness of the price fixing in this case. Since we launched our investigation the prices of replica football shirts have fallen and consumers can now shop around and get a better price."

Sheila McKechnie, director of the Consumers' Association, said: "It is cynical that sports businesses have been exploiting one of the key family markets and have been in effect taking advantage of parents."

James King, of the National Consumer Council (NCC), said: "The announcement from the OFT will serve as a lesson to companies that have been exploiting people for far too long."

Manchester United said it was considering an appeal, while JJB Sports said it was launching an appeal to the Competition Appeal Tribunal.

Yesterday, the supermarket chain Asda cut the price of Manchester United shirts, now made by Nike, at 27 of its stores by £15, to just under £25.