Court gives nod to supermarket designer jeans

The prospect of cheap designer goods being sold again in Tesco in likely to be enhanced by a European Court of Justice ruling, due on Tuesday.

The court is expected to hand down judgement in the case of Tesco v Levi Strauss, the jeans maker, as well as in a similar case involving Davidoff cigars.

Levi had gone to the courts to stop Tesco selling its jeans cheaply in its stores. It argued that Tesco had bought the jeans from illegitimate suppliers and that Levi had the right to restrict which stores sold its goods. The case went to the European Court but an earlier ruling turned out to be less than clear.

Experts in the area expect that the full ruling will say that the European Commission should amend its directive in the area to support the Tesco position and allow supermarkets to sell designer goods. "The court cannot alter the directive but it can say how it thinks it should change," said Gary Assim, a partner of lawyers Shoosmiths.

Tesco and Asda have led the way in selling designer products, such as Calvin Klein underwear and perfumes, at discount prices. The manufacturers have argued that the practice harms their market position.