Competition between Irish supermarkets is too low and retailers have not explained why large price gaps exist between the Republic and Northern Ireland, according to Tánaiste and Minister for Enterprise Mary Coughlan.
Ms Coughlan said she had commissioned a report from Forfás on the cost of doing business on both sides of the border.
She was speaking this afternoon at the offices of the National Consumer Agency (NCA) in Dublin where she was given an update on the agency's work in highlighting the options available to consumers and encouraging increased competition between retailers.
Ms Coughlan welcomed recent price offers by some of Ireland's major multiple retailers but said that given that the overwhelming majority of Irish consumers now do their weekly shopping in one of the main supermarket chains, competition - particularly on like-for-like and branded products - was two low.
"Price competition should not necessarily result in the consumer having to compromise on quality", she said.
She stressed that retailers had a "duty to their customers" to explain why such large price differentials remained between the Republic and the North.
"While retailers have said that the cost of doing business in the Republic is greater and that this accounts for the price differential, given the appreciation of the euro against sterling over the past year, I have asked the national policy and advisory board, Forfás, to assess the relative cost of doing business in both jurisdictions."
She said she expected the report to be concluded next month.
Ms Couglan said there had been progress on prices in recent weeks and the debate on prices, on choice and on quality had "raised awareness".
"Consumers are starting to 'switch-on' to the benefits of shopping around and splitting their shopping basket between different retailers. This change in consumer behaviour is starting to affect enhanced competition between retailers. All of this is welcome progress, but it is clear that we still have some way to go."
