Just one in every 100 people who go on a diet succeed in shedding weight permanently.
Many people battle weight problems
However, the high chance of failure did not stop 34 million Britons trying to lose weight last year, spending more than £10 billion in the process.
Independent market analysts Datamonitor, who conducted the research, says that the diet industry is guilty of raising expectations unrealistically.
The appallingly low success rate of diets reflects badly on the diet industry
This helped turn the UK into the second biggest market for diet-related products in Europe after Germany.
In the UK the average weight watcher spends approximately £300 on diet products each year.
Many on a diet
Datamonitor carried out research among 600 people in seven European countries.
The results suggested three-quarters of the respondents were either on a diet or had been on one recently.
Datamonitor said the makers of diet-related products should ensure consumers were aware they often need to change what they eat in the long term if they want
to get rid of excess weight for good.
Across Europe, the market for diet products has increased from £56.6 billion in 1998 to £62.3 billion last year. It is predicted to reach £67.7 billion by 2007.
In the UK sales of diet products have gone from £9.7 billion four years ago to £10.4 billion in 2002 and is estimated to top £11.2 billion within five years.
Lawrence Gould, analyst at Datamonitor, said: "In 2002, 230.6 million people across Europe attempted a diet. Of these, only 3.8 million will succeed in keeping off the weight that they have lost for over a year.
"The appallingly low success rate of diets reflects badly on the diet industry, and this problem must be addressed effectively.
"The food and drinks industry, as well as retailers, have the
influence and financial leverage necessary to produce coherent information campaigns to educate dieters on nutritional matters."
The research was conducted in France, Germany, Italy, the Netherlands, Spain, Sweden and the UK.