Sweden boosts efforts to change trademark rules

Date: 08/03/01

By Peter Chapman

THE Swedish presidency is stepping up its campaign to force the EU to stop protecting brand-holders such as jeans giant Levi Strauss from cheap 'parallel' imports of their wares from abroad.

Stockholm opposes the current rules, which allow firms to veto sales of their genuine goods procured from outside the Union, for example in the US or Far East. Sweden claims they deny consumers access to cheaper goods and grant multinationals a license to segment markets.

The last time the issue was debated at EU level two years ago, the majority of ministers favoured the status quo, whilst the European Commission cited a lack of clear evidence in favour of changes.

But Sweden's Trade Minister Leif Pagrotsky will tell his counterparts and Commissioner Frits Bolkestein at next week's meeting of EU single market ministers that the time has come for a change.

"We want to keep this issue on the agenda," said a Stockholm source, adding that other Nordic countries, the Benelux and the UK were already on board.

German MEP Hans-Peter Mayer lent support to Pagrotsky in a report debated this week by the Parliament's legal affairs committee, claiming that parallel imports of goods from outside the Union would benefit consumers and lead to lower prices.

Philip Sheppard, public affairs manager of the European Brands Association, which lobbies on behalf of top EU brand names, said both efforts were misguided.

"These claims are against any evidence to date," he said. "They are a triumph of hope over fact. It all assumes that changing trade-mark law will have the effect of pushing down consumer prices. But that assumes that parallel traders will voluntarily lower their prices below what the market is at the moment."

The issue has risen to the top of the Union agenda in the wake of the bitter row in the European Court of Justice between US jeans-maker Levi Strauss and the market-leading UK supermarket chain Tesco.

The retailer wants to be allowed to buy cheap jeans outside the EU and sell them for less than the price charged by authorised dealers in British shopping districts.

But Levi Strauss claims Tesco's practices could lead to the sale of products not specifically designed for the EU market - and could undermine its huge investments in product development.

At the same time, the manufacturer says Tesco does not fully train its distributors and that customers would be given poorer service as a result.

The Swedish Presidency is stepping up its campaign to force the EU to stop protecting brand-holders such as jeans giant Levi Strauss from cheap 'parallel' imports of their wares from abroad.