Adidas and Nike face OFT probe into small retailer shut-out
Adidas and Nike have been referred to the Office of Fair Trading following their decision to only supply major outlets.
The retail shift has fuelled concerns that smaller shops, which rely on the profile of both brands to drive footfall, could be forced to close.
A complaint has been submitted to the competition watchdog’s anti-cartel unit, although investigators have yet to contact either company. While Nike told the Evening Standard it will no longer supply outlets that sell less than £25,000 worth of their products a year, it is known how Adidas qualifies a small retail
A OFT spokesman says: “We consider all complaints we receive and will respond in due course.”
The watchdog will likely assess whether both brands have broken the Competition Act or Article 81 of the EC Treaty. Investigators will also determine whether a criminal offence under Enterprise Act has been committed. If guilty, the companies could be slapped with an unlimited fine.
Adidas and Nike have been forging deeper ties to bigger sportswear retailers such as JD Sports and Footlocker ahead of the crucial World Cup sales period this summer.
In December, Adidas announced it was pulling Chelsea replica kits sold in Sports Direct from next season, kicking off a key phase of its attempts to distance itself from the “pile it high sell it cheap” apparel sold by discount retailers. Meanwhile, Nike told the Evening Standard its decision to no longer supply outlets that sell less than £25,000 worth of their products a year was aimed at cutting costs and improving the customer experience.
Adidas reissued the same statement it released when reports first came to light it was pulling its products from smaller outlets in response to the complaint to the OFT.
It reads: “This decision was not taken lightly but it is in line with our global commercial policy and was made to ensure our business is solid and sustainable, and operates in the most efficient way.
“All business regularly review how they take their products to market and we will continue to supply a wide range of retailers, many of which are independents.”
Nike sait would not comment until after it had been approached by the OFT.
