THE battle between supermarket giants Sainsbury and Tesco in the Northern Ireland market has escalated following the decision by Air Miles to withdraw its incentive scheme from the Tesco owned Stewarts/Crazy Prices Group, in favour of Sainsbury.

Stewarts management has reacted angrily to the decision. A letter sent out to customers throughout Northern Ireland, and signed by marketing director, Mr Jim Megaw, apologises for the discontinuation of the Air Miles scheme, but says it is due to factors beyond the company's control.

Stewarts managing director, Mr Fred Millar, said Air Miles had made the decision based on what was best for it in Britain, and had ignored the interests of the 200,000 people in Northern Ireland who had registered for the scheme.

"I believe it is a mistake," he said, "and that the general public will be letting them know that."

But Air Miles insists it had no choice in the matter, since Sainsbury runs the Air Miles scheme in Britain under an exclusive agreement which rules out the participation of any other supermarket chain. This only became a problem in Northern Ireland when Sainsbury opened its first store in Ballymena just before Christmas. It has since opened a second outlet in south Belfast.

Air Miles can be collected on purchases through a variety of participating businesses, including banks and petrol companies, and can be redeemed against the cost of flights, travel, and entertainment throughout Britain.

In its letter to customers, the Stewarts/Crazy Prices Group, referred to the fact that Air Miles was transferring the scheme to a group which had so far opened only two outlets in the region. But in a statement, Air Miles said that at least two thirds of Air Miles collectors lived within the catchment areas of the two Sainsbury stores.