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Thursday, August 6, 1998 Published at 16:42 GMT 17:42 UK

Business: The Company File

Supermarkets defy designer ban

How prices measured up before the ban

Supermarket giants Tesco and Asda are to continue selling top designer names despite a ruling banning the sale of cut-price goods bought on the 'grey market'.

Two weeks ago the European Court of Justice outlawed the sale of designer goods bought through unauthorised channels outside the European Union on the so-called 'grey market'.

Real Video: BBC Consumer Affairs Correspondent Nicola Carslaw reports on the designer trend
But Tesco has announced it will sell cut-price 'grey market' designer items permanently at two specially designated stores.

The branches in Pitsea, Essex, and New Malden, Surrey, will offer brand name products such as Levi 501 jeans and Adidas sportswear.

Tesco commercial director John Gildersleeve said of the store's defiance of the court ruling: "This is what our customers have been asking for, now they have a chance for unparalleled bargains on an ongoing basis.

"Each range we stockpiled and sold was so popular we have decided to do it on a continuous basis with as many lines as we can in these two newly-dedicated stores."

Manufacturers of designer goods refuse to supply discount retailers claiming they do not want their products sold next to milk and dog food.

In its ruling the European Court said firms could only buy goods from sources other than the producer if they were within the EU.

Asda sets up stall

Asda is also fighting the ruling by setting up a stall in its Wakefield store offering cut-price designer goods.

[ image: Lacroix says the ties are old designs and cheaper elsewhere]
Lacroix says the ties are old designs and cheaper elsewhere
The chain is even running a free coach to the branch from outside the upmarket department store Harvey Nichols in Leeds.

Asda staff dressed in top hats and tails greeted customers and escorted them to a stall labelled "Britain's first grey market stall" which was selling cut price designer perfumes, watches, sunglasses, ties, handbags and scarves.

Asda deputy trading director Justin King said the stall was legal because manufacturers had to take out injunctions banning the sale of specific products.

"The issue is that we are being forced to buy from the grey market. We would much rather buy from the manufacturers but they won't sell to us," he said.

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