March 5, 2021

Adidas Angers All Blacks Fans With Price Policy

AUCKLAND — When the All Blacks, New Zealand’s national rugby team, revealed late last month the new shirts the team would wear for the Rugby World Cup, which begins here in September, it was a proud moment for Adidas, the designer of the uniform and the chief sponsor of the team.

“The All Blacks jersey is one of the most powerful symbols of New Zealand pride, worn by the most successful sports team in the world,” David Huggett, the Adidas country manager for New Zealand, declared in a news release heralding the introduction of the new uniform.

But in the days that followed, fans in New Zealand, where rugby takes precedence over all other sports, discovered that the shirts were being sold online in the United States for about half the local price of 220 New Zealand dollars, or $182, and in the United Kingdom for only slightly more than the U.S. price.

The discrepancy was picked up by major local news outlets, which questioned why New Zealanders were being asked by Adidas, a German company, to pay so much more than consumers in other countries for the official shirt of their own team.

The headline for a story
on The New Zealand Herald’s Web site on Aug. 4 read: “All Black jersey reaction: ‘You’re ripping off the NZ public.”’ The article detailed complaints from readers posted on the paper’s social networking pages. “It’s like they’re robbing New Zealanders. I’d suggest a boycott,” an Internet user giving the name Steve McAteer was quoted as saying.

A controversy had begun to build, bringing the vociferous passions of sports fans into conflict with the financial logic of a multinational company. For Adidas, it became a lesson in the risks of associating a corporate brand with a national obsession.

It is not uncommon for companies to charge different rates for the same product in different countries, but Mike Lee, a senior marketing lecturer at Auckland University who specializes in consumer attitudes toward brands, said the Adidas situation was different because the All Blacks were seen by many in New Zealand as a sacrosanct national treasure.

A few days after the initial outcry, the furor escalated when news outlets reported that Adidas had told Internet retailers selling to international markets to remove New Zealand from their delivery options.

“At that point I think the whole thing took sort of a nasty turn,” Dr. Lee said. “It went from simply a question of economics and costs to an ethical issue of corporate hegemony.”

Adidas has since apologized for that action and withdrawn the instruction, saying it had intended only to protect New Zealand retailers.

Still, the level of national opprobrium rose further. Adidas met with retailers but refused to reduce its wholesale price. So the retailers took action themselves.

The country’s largest sporting goods chain, Rebel Sport, announced Aug. 9 that it would cut the retail price in its shops to 170 dollars, leaving itself only a “very, very slim” margin, according to its managing director, Rod Duke.

The price reduction, also carried out by some smaller retailers, was welcomed by many fans, and Rebel Sport’s stock of the jerseys has nearly sold out, Mr. Duke said. He said he believed that although his company was bearing the financial burden of the price cut, Adidas would suffer in the long term from damage to its brand, which would hurt future sales.

“We’ve had a number of customers come into the stores, throw Adidas products on the floor and say, ‘Look, you might as well burn this,”’ Mr. Duke said.

The exact value of Adidas’s sponsorship deal for the All Blacks shirts has never been made public. When it was signed in 2008, The National Business Review reported that it was similar in size to the company’s contract with the German soccer club Bayern Munich and Nike’s deal with the Inter Milan soccer club. The newspaper said that would place the contract’s value between 21 million and 28 million dollars a year.

Juli Clausen, a spokeswoman for the New Zealand Rugby Union, declined to disclose the exact size of Adidas’s investment in the sport in New Zealand, citing commercial sensitivity, but said the 11-year deal was worth “hundreds of millions of dollars.”

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