Responding to a report from a cross-party select committee of MPs, the Department of Trade and Industry supported its conclusion that consumers would benefit from being allowed to buy branded goods imported from outside the European Union and sold at discount prices.
Retailers, led by Tesco and Asda, have battled for 30 months for the right to sell designer labels such as Levi's jeans, Pringle sweaters, Calvin Klein underwear and Nike sportswear at discount prices. They argue that the present system keeps prices artificially high, resulting in British consumers paying up to 70 per cent more than they ought to.
The European Court of Justice upheld the right of branded goods makers to withhold supplies from the likes of Tesco in a ruling in July last year involving Austrian-made Silhouette sunglasses. However, Tesco is taking another test case concerning Levi's jeans to the court at the end of this year.
The Trade and Industry Select Committee report said that once branded goods had been sold by the makers, retailers should be able to buy from any supplier anywhere in the world and import them into the UK.
The DTI said it would continue with discussions within Europe to clarify or amend the legal framework.
Business Outlook, page 19