Global Brands Clip Brits by up to Forty Per Cent

27 April 2001

A report jointly commissioned by the UK and Swedish governments alleges that British consumers are charged up to forty per cent more by certain global brands than their counterparts in other countries.

The study, copied to all other EU member states, has prompted British trade and industry secretary Stephen Byers to call on the European Commission for action.

Under current European legislation, manufacturers can control which retailers within the EU can resell their products, at the same time dictating the sources from which they can be bought. According to Byers, certain brands are abusing the legislation, using it as a prop to maintain artificially high prices.

Last November the report studied the price of 133 products in the UK, Sweden, France, Germany and the US. In many cases, British retail prices were the most expensive – significantly so in the case of chart CDs, DVDs and computer game consoles.

Demanding a revamp of existing laws, Byers issued a call for reform: “I want the Tescos and Asdas [supermarket groups – the latter Wal-Mart owned – respectively first and third in the UK market] of this world to be able to source the best deals from anywhere in the world and pass those savings on to consumers."

Both supermarket chains have challenged major global brands such as Levi Strauss and Sony on several occasions, sourcing products from outside the EU on the "grey market".

“We want the European Commission to change the Trade Mark Directive so traders can import cheaper branded goods from any country,” said UK consumer minister Kim Howells. “Allowing brands to dictate which retailers can sell their products and where they can import them from is unacceptable. Effectively the directive forces retailers to import goods from the most expensive suppliers.”

The report is on the agenda at today's meeting of European consumer affairs ministers in Stockholm.

News source: BBC Online Business News (UK)