Having already presented its case for importing grey market goods in the EU courts, British supermarket giant Tesco has been somewhat vindicated by a government report.

Published yesterday, the report was commissioned by the UK department of trade and industry and the Swedish government. Through a comparison of 133 branded goods, it clearly showed that British shoppers are paying up to 44% more than their counterparts in Sweden, France Germany and the US for dozens of branded goods; including CDs, DVDs, videos, computer game consoles, cosmetics and clothing.

Tesco found itself in court over its decision to import Sony Playstations and branded Levis jeans from the grey market in the EU, selling them on to UK consumers at significantly cheaper prices than offered at other retailers.

In response to yesterday's report, trade and industry secretary Stephen Byers blasted those companies who are seen to be abusing European trademark legislation and preventing the import of goods from outside the EU for resale inside it. Byers argued that such companies were only committed to keeping prices artificially high.

He commented: "Action is needed to reform the EU law on the protection of branded goods. I want the Tescos and Asdas of this world to be able to source the best deals from anywhere in the world and pass those savings on to consumers."

"We are working with the Swedes to push for removal of trade mark restrictions on the import of branded goods. We hope other member states will support our joint approach. Effectively, the directive forces retailers to import goods from the most expensive suppliers."

Tesco and its sector rival Asda have stressed that if the directive were changed, then consumers would benefit from cheaper prices immediately.