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The European Court sides with Levi Strauss in its battle with Tesco

IT WAS a ruling that had consumers seething with anger and many a free trader crying foul. On November 20th the European Court of Justice decided that Tesco, a British supermarket chain, should not be allowed to import jeans made by America's Levi Strauss from outside the European Union and sell them at cut-rate prices without getting permission first from the jeans maker. Ironically, the ruling is based on an EU trademark directive that was designed to protect local, not American, manufacturers from price dumping. The idea is that any brand-owning firm should be allowed to position its goods and segment its markets as it sees fit: Levi's jeans, just like Gucci handbags, must be allowed to be expensive.

Levi Strauss persuaded the court that, by selling its jeans cheaply alongside soap powder and bananas, Tesco was destroying the image and so the value of its brands--which could only lead to less innovation and, in the long run, would reduce consumer choice. Consumer groups and Tesco say that Levi's case is specious. The supermarket argues that it was just arbitraging the price differential between Levi's jeans sold in America and Europe--a service performed a million times a day in financial markets, and one that has led to real benefits for consumers. Tesco has been selling some 15,000 pairs of Levi's jeans a week, for about half the price they command in specialist stores approved by Levi Strauss. Christine Cross, Tesco's head of global non-food sourcing, says the ruling risks "creating a Fortress Europe with a vengeance".

The debate will rage on, and has implications well beyond casual clothes (Levi Strauss was joined in its lawsuit by Zino Davidoff, a perfume maker). The question at its heart is not whether brands need to control how they are sold to protect their image, but whether it is the job of the courts to help them do this. Gucci, an Italian clothes label whose image was being destroyed by loose licensing and over-exposure in discount stores, saved itself not by resorting to the courts but by ending contracts with third-party suppliers, controlling its distribution better and opening its own stores. It is now hard to find cut-price Gucci anywhere.

Brand experts argue that Levi Strauss, which has been losing market share to hipper rivals such as Diesel, is no longer strong enough to command premium prices. Left to market forces, so-so brands such as Levi's might well fade away and be replaced by fresher labels. With the courts protecting its prices, Levi Strauss may hang on for longer. But no court can help to make it a great brand again.

×¢£¨1£©£º±¾ÎÄÑ¡×ÔEconomist; 11/24/2001, Vol. 361 Issue 8249, p58, 1/2p

×¢£¨2£©£º±¾ÎÄÏ°ÌâÃüÌâÄ£·Â¶ÔÏó2001ÄêÕæÌâtext 5£¨ÆäÖÐÒò2001ÄêÕæÌâtext 5Ö»ÓÐ4¸öÌâÄ¿£¬ËùÒÔ±¾ÎĵÚ5ÌâÄ£·Â²ÎÕÕ¶ÔÏóΪ1999Äê Text 1µÄµÚ4Ìâ¡£)

1. Which of the following is not true according to Paragraph 1?

Consumers and free traders were very angry.

Only the Levi¡¯s maker can decide the prices of the jeans.

The ruling has protected Levi¡¯s from price dumping.

Levi¡¯s jeans should be sold at a high price .

2. Gucci¡¯s success shows that _______.

Gucci has successfully saved its own image.

It has changed its fate with its own effort.

Opening its own stores is the key to success.

It should be the court¡¯s duty to save its image.

3. The word ¡°specious¡±(line 12, paragraph 2) in the context probably means _______.

responsible for oneself

having too many doubts

not as it seems to be

raising misunderstanding

4. According to the passage, the doomed fate of Levi¡¯s is caused by such factors except that ________.

the rivals are competitive

it fails to command premium prices

market forces have their own rules

the court fails to give some help

5. The author¡¯s attitude towards Levi¡¯s prospect seems to be _______.

biased

indifferent

puzzling

objective

´ð°¸£ºB B C D D

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seethingadj.·ÐÌÚµÄ, »ðÈȵÄ

foul adj.ÏÂÁ÷µÄ£¬´ÖË׵ģº

segment v.·Ö¸î

innovation n.¸Ä¸ï, ´´ÐÂ

specious adj. ËÆÊǶø·ÇµÄ; ËƺõÕýÈ·µÄ£¬µ«Êµ¼ÊÈ´ÊÇÃýÎóµÄ

arbitrage v. Ì×»ã, Ì×Àû½»Ò×

with a vengeance ÃÍÁÒµØ;¼«¶ÈµØ

licensing n.×¢²áµÇ¼Ç

discount n.ÕÛ¿Û

resort vi.ÇóÖú, ËßÖî

premium n.¶îÍâ·ÑÓÃ, ½±½ð, ½±ÉÍ, ±£ÏÕ·Ñ, (»õ±Ò¶ÒÏÖµÄ)ÌùË®

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