Luxury retailers lambast EU plans to reduce brands' control

The review would mean brand owners losing their right to choose where their products are retailed.

A source in Brussels said relaxing brand owners' rights "could lead to Lidl selling BMWs".

The source said any brand that distributes selectively would be affected, from luxury goods brands to football kit makers such as Adidas and Umbro.

Luxury retailers' organisation Walpole is actively fighting any reduction in brand owners' controls. It is also opposing etailers currently lobbying EU politicians to relax selective distribution laws.

In the campaign, supported by its core members including Harrods, Links of London and Liberty, Walpole is lobbying Westminster and EU members to highlight luxury retailers' stance.

The organisation argues that relaxing the laws would leave the sector more vulnerable to the dangers of counterfeiting.

At present, brand owners can choose who distributes their goods and retailers must meet certain objectives, including satisfactory presentation of products, well-trained personnel and a suitable sales environment. In the past, supermarkets have fought hard to be able to sell products sourced on the grey market, such as England football kits, at discounted prices, and this has been strongly resisted by the brands.

Walpole deputy chairman Guy Salter said: "We feel if the current laws were to be changed to allow a free for all, it would significantly affect a large group of people, from small craftsmen to the larger fashion houses. It would cause a problem as far as customer trust in whether or not a product is genuine is concerned."

The source said that it is unlikely that brand owners would completely lose their distribution rights, but added that Walpole is prudent to make moves to protect its members.