Rangers have entered a commercial agreement with Nestle Confectionery, making an official announcement on Wednesday.
The company, which is valued at £209bn, will be providing their confectionery products to Ibrox and Edmiston House.
Nestle Confectionery have production facilities in York, Halifax and Girvan to ensure the best-in-class service in the United Kingdom.
Nestle deal significant for broader commercial agreements for Rangers
Adam Williams, GRV Media’s Head of Football Finance and Governance Content, has issued his verdict as Rangers made an announcement on their official website.
He claims that while it does not move the needle significantly, it is important for the broader commercial agreements for the Light Blues.
It also does not appear to include any advertising or branding elements, and it seems to be purely a supplier deal.
Speaking exclusively to Rangers News, Williams said: “Deals like this don’t move the dial too much, but they are part of a broader patchwork of commercial arrangements which are significant for Rangers.
“First off, it looks like it’s just a supplier deal rather than including any advertising or branding elements. At least, that’s the impression the statement gives, and clubs usually shout about that sort of stuff if it includes branding too.
“If that’s how the deal is structured, Nestle will probably have paid a fee for category exclusivity, so they are the only company allowed to sell confectionery to Rangers to then offer to fans at Ibrox and Edmiston House.
“Then, Nestle will probably sell wholesale to Rangers at discounted prices and then the club gets to keep the retail margin. Sometimes there are rebates once the club hits a certain number of sales.“
Rangers earned around £12m from retail and other commercial activities
Last season, the Ibrox outfit earned £11.9m from their commercial activities, and the Nestle agreement will likely fall into that category.
It is a deal that Nestle would like, as there are 52,000 potential customers every matchday at Ibrox, and that will benefit their bottom line as well.
Williams continued: “It’s the kind of deal that Nestle will like because Rangers have nearly 52,000 potential customers at Ibrox every week, so they will consistently need product.
“It’s hard to say without seeing the contract, but that’s the way a lot of clubs do it. If it is indeed a supply-only deal, this probably falls into the ‘retail and other commercial activities’ category in Rangers’ accounts, from which they earned £11.9m last season.
“The more matches you have at Ibrox, the more KitKats and whatnot you can sell. So it’s likely not one of those deals that Rangers get X thousand pounds, but rather one that increases in value the more they sell. It all ties back into having the maximum number of home games as possible, so European football is essential to their commercial income as well as their matchday and prize money revenue.“
