The court's advocate-general gave his initial "opinion" against the trade consortium, but the decision is not binding and the final verdict will not be known for several months.

The quality of the Parma ham is not impacted at all by where it's sliced and packaged

Asda

An Asda spokesman told BBC News Online: "It's a victory for commonsense and the beginning of the end of what was a ham-fisted attempt to stop us offering Italian's best Parma ham at the lowest possible price.

"The opinion seems to support our view that the quality of the Parma ham is not impacted at all by where it's sliced and packaged."

The case began in November 1997, when the consortium took Asda to court in the UK because it claimed Italian law demanded it carry out the slicing and packaging itself, in the Parma region.

Cheaper

Asda defeated the action, but the House of Lords granted the consortium leave to appeal to the European court.

The supermarket maintained it was breaking no EU rules because the ham is genuine and only packaged where prices were competitive.

It further argues the Italian law is overruled by EU legislation.

In 1997, Asda's ham was produced from Parma pigs and produced by Fiorricci, one of the region's largest ham producers and a member of the consortium.

Parma pigs are used by Asda

The imported ham was sliced and packaged near Chippenham in Wiltshire.

Nowadays Asda's "extra special" pre-packed Parma ham is sliced and packaged in the Italian region.

But its delicatessen Parma ham is sliced in its stores after being imported.

Asda said it had been notified in writing by Wiltshire and West Yorkshire trading standards officers did not breach any EU rules.

The supermarket said its packaging procedures meant it could sell Parma ham 60% cheaper than its rivals.