Adidas runs into trouble at Tesco

Customers of Britain's biggest supermarket chain can today pick up cut- price sportswear along with their frozen turkey and toilet rolls.

To the horror of Adidas, its wares go on sale at 200 Tesco stores nationwide. Some items are reduced by pounds 20 and Tesco predicts the pounds 2m worth of bargain goods will be snapped up within two weeks.

The whole range of Adidas footwear and clothing will be available. The deals include a pair of SL96 Plus Lea running shoes, which usually cost pounds 49.99 but for which Tesco is charging pounds 25, and a hooded top - normal price pounds 37.99 - which is going for pounds 28.

Earlier this year, it sold 30,000 pairs of Levi's jeans at 40 per cent discount. Like Levi Strauss, Adidas spends millions advertising its products and is refusing to co-operate with the supermarket chain. It is advising customers to boycott the bargains.

Anne Tyrer, spokeswomen for Adidas, said: "Adidas make high-performance, technology-based products and staff in the authentic sports retail channels can give expert advice and support, for example about stability and cushioning, at the point of purchase.

"People can be assured that it's authentic stock and the latest range. Tesco staff do not have that specialist knowledge and customers may walk away with ill-fitting clothes."

But Tesco says this is an excuse to keep the prices high and has branded the sportswear company a "bad sport".

John Gildersleeve, commercial director at Tesco, said: "We are offering our customers big brands at unbeatable prices. For too long the brand manufacturers have argued against supplying Tesco because we don't fit certain image requirements.

"Therefore brands preserve high profit margins resulting in consumers paying more than their American counterparts - Adidas are bad sports and we want to get our shoppers running at a price they can afford."

Tesco has been backed by Nigel Griffiths, consumer affairs minister, who is examining the 1984 Trade Marks Act which is being used to prevent British companies selling imported branded goods at low prices.

Mr Griffiths said: "I want to cut artificially high prices for the British customer. Selective distribution hits the pockets of the poorest most hard. What Tesco is doing is good news for shoppers - that is my priority."

Adidas's refusal to supply Tesco has forced the supermarket to go direct to a supplier in North America. In anticipation of the high demand, Tesco is considering limiting customers' purchases. "It would be much easier to work directly with the company to ensure a constant supply. With the Levi's jeans, some stores limited customers to one per pair."

This is the latest in a series of assaults by supermarkets on goods they deem to be over-priced. Books, medicines, skin care products and compact discs are other areas targeted.