Tesco has told British suppliers they must bring the prices they charge the company's Irish stores into line with those operating in Britain. This could mean lower prices for consumers, but it has also led to claims that up to 700 jobs might be lost in the Irish distributive sector.
Meanwhile Tesco's Irish subsidiary, Power Supermarkets, has told Irish suppliers they face "punitive action post-Christmas" if they do not provide "100 per cent support in terms of adequate supplies to cover all the extra trading hours" during the Christmas holiday season.
The company is planning to extend opening hours at all its stores, including 24-hour shopping at four stores on December 23rd and 24th.
About 70 Irish import and distribution companies, employing 3,000 people, currently service Tesco's Irish chains - Quinnsworth and Crazy Prices. British suppliers have been told in a circular from Tesco's headquarters in Cheshunt, Hertfordshire that existing arrangements with Irish agents "must not get in the way of taking our business in Ireland forward".
The director general of RGDATA, Mr Michael Campbell, says 25 per cent of the supply and distribution market in the Republic will disappear, if Tesco's British suppliers decide to bypass local firms.
In the circular issued by Power Supermarkets, Irish suppliers have been notified of the extended opening hours that would operate at Quinnsworth and Crazy Prices stores between December 22nd and January 1st. "We expect 100 per cent support in terms of adequate supply to cover all the extra trading hours. Failure to meet this requirement will result in punitive action post-Christmas."
A spokesman for Power Supermarkets said last night that the circular was only meant to go out to bread suppliers, but had inadvertently been sent to some other suppliers as well. Suppliers who failed to meet requirements would "go to the back of the queue in terms of access to shelf space".
Meanwhile the circular issued from Tesco's British headquarters was aimed at equalising the terms under which multinational companies supply the group's stores. "All we are asking is transparency in costs, so that we can bring in price equity for customers in both markets", he said. It should lead to lower prices for Irish consumers.
Mr Campbell expressed anger at the contents of the circulars. He said his organisation would be asking the Director of Consumer Affairs to investigate whether Tesco was in breach of the Groceries Order on fair competition.
Mr Michael Corcoran, of the Marine Port and General Workers Union, who represents many workers in the sector, says it will lead to job losses and a reduction in earning power of surviving employees.
