Tesco supermarkets have no right to sell cut-price Levi jeans and other branded goods bought outside the EU, the European Court of Justice has ruled.
The decision is a blow to the practice of purchasing goods on the "grey market", in which retailers bypass local distributors and buy at lower cost on world markets.
Levi took the case after Tesco bought a supply of its 501 jeans from wholesalers in the US and Mexico.
The supermarket chain said the decision was a "disappointment for customers" while Levi called it "a strong win for brand owners, who invest heavily in research and development and their retail networks".
The European Consumers' Organisation said the ruling was "clear proof that the current law on trademarks needs to be changed".
Under existing rules, it claimed, trademarks were being used to segment markets so as to deny consumers the choice of buying jeans that are sold freely on the US market.
