An urgent overhaul of the retail and planning regimes in the Irish Republic is needed to allow retailers such as Asda to enter the market, according to the National Consumer Agency.

A major shake-up would attract new players into the €8bn-a-year market, generate competition and lower prices, said Ann Fitzgerald, head of the statutory body.

At present, the market's big two, Tesco and Dunnes, which together account for more than 50% of sales, "are merely matching each other on prices".

The NCA's latest price survey found that Tesco and Dunnes charged more than 30% more for groceries in the Republic than they did for the same lines in Northern Ireland. A basket of 42 brands was 31% more expensive in Dunnes in the Republic, even when tax was taken into account, while Tesco shoppers in the Republic paid 28% more on the same basket than in Northern Ireland.

Fitzgerald, who is on record as saying that the Irish market "badly needs an Asda", said the NCA also found a much greater level of competition in the Northern Ireland grocery market. There was a €2.40 difference between a basket of 22 items in Tesco and Dunnes' stores in the north, while in the Republic the prices were identical. "We believe the greater number of players in Northern Ireland contributes to competition," she said.

Of the 42 brands surveyed in Tesco outlets, just five cost less in the Republic while only one was cheaper in Dunnes. Some items were more than twice as expensive in the Republic, claimed the agency.

Dunnes declined to comment while Tesco claimed it was "continuing to bring prices down".

The findings have prompted calls in the Irish parliament for a full-scale investigation by the Competition Authority, while some politicians urged a change in company law to force multiples to declare their Irish profit margins.

Topics