Consumer concerns over ruling on designer products

The Director of Consumer Affairs, Mr William Fagan, has expressed his concern that consumers might lose out following a European…

The Director of Consumer Affairs, Mr William Fagan, has expressed his concern that consumers might lose out following a European Court of Justice ruling yesterday which appears to outlaw the sale of designer label products at cheaper prices in some chain stores.

Tesco has recently bought in designer products, including Timberland, which produces shoes and casual clothes, Levi, Calvin Klein, as well as Sony from the US, where they are for sale at lower prices than in Europe.

The European Court said a 1988 European trademark directive meant that a trademark owner within the EU could prevent products, purchased on the so-called "grey market", bearing that mark from being imported into EU countries without approval.

"I'm largely in favour of grey imports. It keeps people on their toes," said Mr Fagan.

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A Tesco spokeswoman in Dublin, Ms Sarah Morrison, said they sold quite a number of designer label products. They intended to continue selling them as they were going very well. There were reductions of 50 per cent on the top-range products.

"The implications of the judgment will have to be assessed. It could have implications right across the business. Clearly, we are looking at that," Ms Morrison said. In Britain, Tesco spokesman, Mr Alan McLaughlin, said: "We will still be able to find these goods and sell them, but it will be from a restricted market. We think there should be fair competition in the market place. Our customers don't want to pay £50 for a pair of Levis; they want to pay £30. Why should they be paying between 20 per cent and 50 per cent more for jeans in this country than they would in the United States?"

A British Consumers' Association spokesman said: "We accept that trademarks need to be protected but not without some form of balance which allows consumers to pay a fair price for goods.

"This decision does not strike a balance - trademark owners benefit; the consumer loses."

Britain's Consumer Affairs Minister, Mr Nigel Griffiths, promised to challenge the ruling. He said he would be consulting retailers on the best response to a decision which effectively sanctions price fixing for up-market perfume, clothes and sportswear.