Tesco has set off a price war in the Irish Republic, slashing 20% off the cost of more than 50 food, drink and household products in its 75 stores across the country. Its big local rival, Dunnes Stores, has immediately hit back, with matching reductions on a number of staple goods, including bread, milk and butter. The third Irish chain, Superquinn, which has some 30 outlets, has also joined in, cutting prices on a range of products by a similar amount. The outbreak of hostilities has sent a shiver of apprehension through the independent retail sector. RGDATA, the small grocers' organisation, has won an assurance from consumer affairs director Carmel Foley that the price battle will be closely monitored by her inspectors to ensure there is no breach of the law banning below cost selling. RGDATA director general Ailish Forde said: "We have no objection to price cuts so long as everyone in the market is trading fairly and within the law. "We would just remind consumers that the aim of price cuts by the multiples is to get them into the store, where the bulk of items are probably dearer than elsewhere." All of the reductions are on own label goods, with milk down from I£1.09 to 86p for two litres. Tesco Ireland md Maurice Pratt described the move as a contribution to the fight against inflation, currently running at 6%, the highest in the EU. The Irish government recently urged retailers to keep prices down. Some in the Irish trade suggest, however, that it is the market challenge posed by German newcomers Aldi and Lidl which has motivated Tesco's price reductions. Significantly, the prices of the 50-plus Tesco items, after the reductions, will be the same as those currently charged by Aldi and Lidl. {{NEWS }}

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