Textile giant Cone Mills will no longer be the exclusive supplier of denim for Levi's 501s and is holding talks about setting up a joint venture with a Turkish denim producer to sell denim in Europe, it was reported on Thursday.

The Greensboro News & Record newspaper said Cone and Levi Strauss have amended a 1992 deal to allow Levi Strauss to buy denim for 501s from other sources beginning March 30, 2003. Cone will also be allowed to sell 501-style denim to other firms.

The North Carolina-based paper added that the amendment follows EU threats to slap a 30 per cent tariff on denim, while its plans to set up a joint venture in Turkey come as it looks to cash in on the European denim market.

Cone CFO, Gary Smith, said in a filing with the Securities and Exchange Commission: "Turkey is to Europe much as Mexico is to the US. Hopefully we'll have something to announce in the next couple months. We've been talking about this for over a year."