Man U named in kit prices scandal

A TOP SOCCER club, big-name retailers and even the Football Association face multi-million pound fines after being warned today over fixing the price of replica shirts. The Office of Fair Trading said it was considering finding companies including Manchester United and Umbro guilty of keeping the cost of shirts artificially high. They would then face huge fines.

Companies being investigated also include JJB Sports, Allsports, Debenhams, John David Sports and the FA itself. It is thought millions of fans across Britain could have been paying above the odds for their kits for the past few months. Rather than allow stores to drop prices to compete for customers, the firms stand accused of rigging the price across all their retail outlets.

A spokesman for the FA has said it was aware it faced allegations of price-fixing. He said he was 'sure' the FA would help the OFT with all enquiries but refused to comment further. The OFT said it proposes to find that the firms 'entered into a number of agreements to fix the price of football kits manufactured and supplied by Umbro, infringing Chapter I of the Competition Act 1998'.

In January a leaked memo from Umbro revealed that the sportswear giant tried to ensure that leading sports shops did not discount England's 'three lions' shirt below the official price of £39.99. It is claimed that stores were told that supplies of top-selling club kits such as that of Manchester United might be 'interrupted' unless they co-operated.

The OFT raided Umbro's headquarters in Cheshire and searched JJB Sports' base in Wigan. The documents made it clear that in summer 2000 the company contacted JJB, Sports Soccer, First Sport, JD Sports and Allsports to ensure there was no discounting. It congratulated Umbro staff on a 'major step forward' in getting the five to sell adult England shirts at £39.99.

It is thought that fines could reach 10% of the companies' annual turnover - which in the case of Umbro would be about £12.5m. The OFT has given the firms accused the chance to reply to the allegations before a formal charge is made.

The watchdog's investigation was launched in June last year, with the dawn raids on Umbro and JJB Sports, an OFT spokesman confirmed. It is not the first time it has looked into allegations of anti-competitive agreements involving replica kits. In 1999 it carried out some inquiries but additional powers given to it by the 1998 Competition Act - which came into force in March last year - have since helped investigators. The watchdog's final decision is expected in the autumn.

The shares of all the quoted companies named in the OFT announcement were marked down heavily in the City today. JJB Sports fell 11.5p to 357.5p, Manchester United 3.5p to 115.5p, JD Sports 7.5p to 341p and Debenhams 7.5p to 375p.

The news could not come at a worse time for football clothing manufacturers, with shops full of World Cup merchandise. It is estimated that sales will top £100m in Britain alone.