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The BBC's Daniel Boettcher
"Manufacturers of designer goods claim supermarket sales tarnish the image of their brands"
 real 56k

Alan Christie, Levi Strauss and David Sawday, Tesco
discuss the arguments for and against Tesco selling Levi jeans
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Thursday, 5 April, 2001, 09:23 GMT 10:23 UK
Tesco claims jeans victory over Levi's
man buying levis jeans
Stores offer savings on designer brands
By BBC consumer affairs correspondent Daniel Boettcher

The supermarket chain Tesco is claiming a victory in a long-running battle to be allowed to sell cut-price designer brands in its stores.

The European Court of Justice, considering a test case between the company and clothes manufacturer Levi Strauss, appeared to accept on Thursday, that traders such as Tesco should have their interests considered.

"This is a key victory for consumers in Britain," Chris Leake, a spokesman for the retailer told BBC News Online.

"Unless a British court decides the European Court is talking nonsense, which is highly unlikely, then we are perfectly OK to continue."

But a EC spokesman said the legal opinion was "complex and confusing" and gave no clear indication of how the law on trade marks should be interpreted.

"It's not immediately clear what the implications are going to be," he said.

And Levi's itself put an entirely different interpretation on events saying that the European Court "has today reaffirmed the existing right of trade mark owners to control imports of their branded products into the European Economic area".

It said it is only when trademark owners waive that right that so-called 'parallel importers' rights - such as Tesco's - have to be considered.

"Levi Strauss, of course, has not waved its right," the company said.

After the European Court makes its full ruling, the case is due to go back to the UK courts.

"Levi Strauss & Co welcome this," Levi's said.

Mr Leake, for Tesco, added that the retailer would now be looking to other markets, such as the US, to satisfy the demand from its consumers.

"We're convinced we can continue giving great value for our customers," he said.

Jeans and beans

Supermarkets have been keen to branch out beyond their traditional lines - next to the shelves of bread and beans they are now stocking electrical goods, mobile phones and clothes, some from top design names.

But the manufacturers of some of those products are not keen to see their brands in supermarket aisles, especially as the prices are often lower than those charged by approved retailers.

You've got to be allowed the choice to go to a supermarket and save 20-30

Simon Soffe
Levi Strauss has been locked in a protracted legal battle with Tesco which has been buying cheap, though genuine, Levi's jeans from outside the European Union, then selling them in its stores.

Tesco spokesman Simon Soffe said: "If you want to go to a specialist shop that's great - but you've got to be allowed the choice to go to a supermarket and save 20-30.

"At the moment the brands are trying to stop that choice - that's not right and we need to get that changed."

But Alan Christie, from Levi Strauss, said selling its jeans in supermarkets undermined the brand, making it less attractive to its customers.

"For us it's how the consumer sees Levi's jeans when they go out shopping on a Saturday afternoon.

"Do they get the presentation they expect to receive, do they get the customer service they're entitled to receive?"

In the case before the European Court of Justice, the company argued that retailers buying its goods from suppliers abroad and then re-selling them without permission, are breaking the law.

The final decision by the European Court is due to be made later in the summer.

The matter would then go back to the British courts.

If Tesco wins the case, the floodgates would be open for more cut-price branded goods for the UK consumer.

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See also:

16 Jan 01 | Business
Tesco confident in jeans battle
16 Jan 01 | Business
Jeans battle goes to court
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