The music industry has lost more than 30% in sales since 2001 because of illegal downloading, a top industry official said yesterday, giving evidence in a Swedish trial.

John Kennedy, the head of the International Federation of the Phonographic Industry, told Stockholm District Court that Swedish site The Pirate Bay had become "the number one source of illegal music," following court actions against two other popular file-sharing sites, Grokster and Kazaa.

"Over a period of time, piracy has done immense damage to the music industry," Kennedy said, adding that illegal downloads had caused industry sales to tumble from $27bn (£19bn) in 2001 to $18bn (£13bn) in 2008.

Kennedy testified on behalf of a handful of record companies, including Sony BMG and EMI, which together with movie companies such as Universal and Warner Bros are seeking 117 million kronor ($13.2m) in compensation and damages.

"I believe they are justified and may even be conservative because the damage is immense," he said of the claim.

Gottfrid Svartholm Warg, 28; Peter Sunde, 30; Fredrik Neij, 30; and Carl Lundstrom, 48, are accused of breaking Swedish copyright law by helping millions of internet users download protected music, movies and computer games for free through The Pirate Bay. They have pleaded not guilty.

The trial is scheduled to end next month.