What is the true value of a brand?
In the advertising world, that's the debate at the heart of a legal tussle between Levi Strauss & Co. and a British supermarket chain fighting to sell cheap, imported Levi's blue jeans.
For retailer Tesco PLC, which last week claimed victory in the latest episode of the two-year legal struggle before the Euro-pean Court of Justice, the issue is about giv-ing shoppers the chance to buy a designer product at a lower price. Tesco says it can sell Levi's jeans for �30 (�47.76) less than other U.K. retailers by going outside the U.K. to find cheaper suppliers of the jeans.
But for Levi Strauss much more is at stake.
The company recently launched a new advertising blitz to rebuild its brand in Europe after a lull during which the Levi's name lost ground to competitors such as Diesel and Earl Jean.
That experience, the company and sev-eral brand gurus say, is undermined when the jeans are sold under the same roof as racks of ham and frozen vegetables.
In an important development in the Tesco Levi's case, a legal adviser to the European Court of Justice said last week that trademark owners such as Levi Strauss aren't the only ones with business rights related to the goods they sell. The interests of resellers and importers, such as Tesco, must be taken into account as well.
Levi Strauss insisted that its arguments eventually would be vindicated. But trademark lawyers said the decision migh mean the company would have to show that superrnarket sales of its jeans actually damaged it, not just that it disliked the fact, in order to stop the sales.
Tesco says it has provided the Sai Francisco based apparel maker with more than 100,000 new customers by selling the jeans as part of its nonfood merchandise. Jeans aren't the only brand name items found on British supermarket shelves these days. Nike, Adidas, Calvin Klein, Sony and Apple products, not to mention a host of perfume brands, have all been on offer at bargain prices.