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1、TROUSERSUIT TheEuropeanCourtsideswithLeviStraussinitsbattlewithTesco ITWASarulingthathadconsumersseethingwithangerandmanyafreetradercryingfoul.OnNovember20ththeEuropeanCourtofJusticedecidedthatTesco,aBritishsupermarketchain,shouldnotbeallowedtoimportjeansmadeb
2、yAmerica''sLeviStraussfromoutsidetheEuropeanUnionandsellthematcut-ratepriceswithoutgettingpermissionfirstfromthejeansmaker.Ironically,therulingisbasedonanEUtrademarkdirectivethatwasdesignedtoprotectlocal,notAmerican,manufacturersfrompricedumping.Theideaisthatany
3、brand-owningfirmshouldbeallowedtopositionitsgoodsandsegmentitsmarketsasitseesfit:Levi''sjeans,justlikeGuccihandbags,mustbeallowedtobeexpensive. LeviStrausspersuadedthecourtthat,bysellingitsjeanscheaplyalongsidesoappowderandbananas,Tescowasdestroyingtheimageands
4、othevalueofitsbrands――whichcouldonlyleadtolessinnovationand,inthelongrun,wouldreduceconsumerchoice.ConsumergroupsandTescosaythatLevi''scaseisspecious.ThesupermarketarguesthatitwasjustarbitragingthepricedifferentialbetweenLevi''sjeanssoldinAmericaandEurope――aserv
5、iceperformedamilliontimesadayinfinancialmarkets,andonethathasledtorealbenefitsforconsumers.Tescohasbeensellingsome15,000pairsofLevi''sjeansaweek,forabouthalfthepricetheycommandinspecialiststoresapprovedbyLeviStrauss.ChristineCross,Tesco''sheadofglobalnon-foodsou
6、rcing,saystherulingriskscreatingaFortressEuropewithavengeance. Thedebatewillrageon,andhasimplicationswellbeyondcasualclothes(LeviStrausswasjoinedinitslawsuitbyZinoDavidoff,aperfumemaker).Thequestionatitsheartisnotwhetherbrandsneedtocontrolhowtheyaresoldtoprotec
7、ttheirimage,butwhetheritisthejobofthecourtstohelpthemdothis.Gucci,anItalianclotheslabelwhoseimagewasbeingdestroyedbylooselicensingandover-exposureindiscountstores,saveditselfnotbyresortingtothecourtsbutbyendingcontractswiththird-partysuppliers,controllingitsdist
8、ributionbetterandopeningitsownstores.Itisnowhardtofindcut-priceGuccianywhere. BrandexpertsarguethatLeviStrauss,whichhasbeenlosingmarketsharetohipperrivalssuchasDiese
