BEHIND THE HEADLINES: Tesco reacts to Euro court's decision on Levi's

Tesco has kick-started a PR campaign against Levi Strauss after

losing its European Court of Justice case over the import of 'grey

market' goods from outside the European Union.



The verdict on Tuesday saw the ECJ uphold Levis' rights to regulate the

supply and pricing of its goods in the EU, despite their availability at

lower prices elsewhere.



A Tesco spokesman said the supermarket is using the loss of consumer

choice represented by the decision as the template for its PR battle:

'They're taking a chance as some of the arguments they (Levi Strauss)

put to the Court will not go down very well with consumers as they are

looking to limit their choice of where and at what price they can buy

goods.'



The case originated from the differences in retail prices of branded

products between countries, with UK recommended retail prices up to

twice those in the US.



In light of the decision, the British Brand Group (BBG), the body that

seeks to protect the rights of brands operating in the UK, also stepped

up its PR. The body maintains that manufacturers need to sell goods at

higher prices in Europe due to higher regulatory standards.



As part of the strategy, BBG director and media spokesman John Noble

undertook a raft of media interviews in an effort to defend the trade

body's stance.



He was supported by retained agency Hill & Knowlton, which handled the

media enquiries that ensued.



Sarah Gower, PR head at Adidas, which is another of the firms affected

by grey market retailing in the UK, admitted her employer is in the same

position as Levi's.



But she indicated that the sportswear giant does not see any threat to

its reputation through efforts to maintain its pricing structure, since

'the brands are strong enough.'



A spokesman for Asda, which pre-empted the ECJ's decision with its own

line of grey market goods, said the supermarket would continue to pursue

the practice.



While he admitted that the move had the effect of acting as an incentive

for Christmas shoppers to visit the store, he said he 'couldn't possibly

say' whether the store's current stocks originated from within the EU or

outside.



Tesco, too, has vowed to continue stocking EU-sourced goods, refusing to

admit defeat in an area widely perceived as the next battleground for

the supermarket price wars.



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