Nike, Adidas and Puma put historic differences aside to target tariffs and inactivity crisis
The sporting goods industry is no stranger to bitter rivalries, from the family split that spawned Adidas and Puma to the former’s decades-long battle for supremacy with Nike.
Now, however, those brands and others have united to lobby policymakers worldwide for lower tariffs as part of a joined-up approach which they say will tackle rising inactivity.
Central to those efforts is a report published by the World Federation of the Sporting Goods Industry (WFSGI), which quantifies the size of its economic contribution.
The report, produced by consultants Oliver Wyman, states that the industry, which includes retailers and distributors as well as manufacturers, generates a global GDP of $675bn, equivalent to that of Sweden.
In addition, it supports 28m jobs across the world and generates $120bn in direct tax revenues – a figure that almost doubles when taxes across supply chains and workforce spending are factored in too.
Its aim is to make the argument that this huge industry is subject to onerous tariffs and taxes that accumulate along the value chain which, if eased, could deliver greater value by facilitating more exercise and creating concomitant societal benefits.
“Unlike many consumer industries of comparable scale, the sporting goods industry generates a public health dividend,” the report says.
“Its products are the enabling infrastructure of physical activity, and its commercial success is structurally aligned with getting more people moving more often.
“This is the industry’s distinctive economic position: its long-term growth and the public’s health are mutually dependent.
“Greater participation in sport and physical activity increases demand for sporting goods, which funds continued investment in innovation, production and participation initiatives – and when participation falls, both the industry and society lose.
“In effect, sporting goods are taxed like discretionary luxuries while delivering outcomes that governments prioritise and invest billions pursuing through health and related budgets.”
Sporting goods industry seeks dialogue with policymakers
The report says sporting goods face an average applied tariff of 14 per cent, almost three times that of all traded goods. Medicine, while not a direct comparison but also a contributor to health and illness prevention, is typically subject to two per cent tariffs.
Meanwhile, an inactivity epidemic is estimated to cost $30bn a year in healthcare and threatens to dent sporting goods revenue by $133bn in the next four years. As a starting point, the WFSGI hopes it will open dialogue between the industry and policymakers the world over.
“Policymakers want more active populations, and that’s the key. Those policymakers differ from country to country. Sometimes it’s government, sometimes it’s coalitions. But affordability is one of the key drivers, so this is why it’s all linked,” Tony Simpson, global sports industry lead at Oliver Wyman, tells City AM.
“Many countries don’t have a DCMS like we do, linking and talking to the health and education outcomes, sometimes it is in silos. But you’re starting to see a confluence of people coming together now, which is making a real difference.
“The more affordable products are, the better the outcomes. This isn’t affordability for affordability’s sake. It’s affordability to increase wellbeing and produce better outcomes, and that can be done through policy.”