The Consumers Association of Ireland yesterday came out in support of Irish diary farmers who warned that the supermarkets must fund their own milk price war, not the dairy producer.
A "milk war" has been sparked by Dunnes Stores which 10 days ago offered own-brand milk imported from Northern Ireland at 99 cent for two litres.
As its rivals dropped milk prices to match that price, dairy farmers were told by the main co-operative processors that they may be forced to drop the price they pay to farmers as a result of pressure from the supermarkets.
Mr Dermott Jewell, chief executive of the Consumers Association of Ireland, said that while his organisation was all for competition, it had to heed the statements of the farming organisations that such a milk price could drive many of them out of business.
"As a principle, we believe that the retailers should fund such promotions which, after all, are designed to bring customers into their shops," he said.
As a meeting of the Irish Farmers Association National Executive Committee continued last night, the Competition Authority said it was "keeping a watching brief" on the evolving situation.
The Authority moved legally against members of the Irish Farmers Association two years ago when individuals prevented milk moving into or leaving a processing plant at Convoy, Co Donegal, in a protest over retail milk prices.
It obtained court orders against named individuals involved in the dispute, who gave undertakings to the court not to disrupt normal activity there.
It also threatened a number of dairy farmers who had made statements on the Aldi grocery chain group's move into milk sales.
A spokesman for the Irish Farmers Association said last night that its members were "very angry at the withdrawal of goodwill by Dunnes from Irish dairy farmers by selling imported milk at such a price.
He said the National Council had called on its leadership to alert all farmers to the implications of what had been happening.
Last week, the IFA's National Dairy Committee said the loss of sales to its members, and the possible cuts which would be forced on them, could cost the Irish dairy farmers in excess of €3 million per annum.
Dunnes Stores did not reply to queries on the situation and a spokesman for the Office of the Director of Consumer Affairs said it had not received any complaint from any of the farm groups alleging below-cost selling.
The Sinn Féin spokesman on Agriculture, Mr Martin Ferris, attacked the threat by dairies to cut the producer price due to the milk war.
"There is no reason whatsoever that farmers should have to bear the brunt of the price war between the major retailers," he said adding that retailers should fund their own phoney war in what should be known as "loss leading".