Tesco has been asked to clarify its pricing policies just a day after launching a promotion on more than 1,000 products.
A report in The Irish Times today found the retailer had increased the prices of some well-known products just weeks into the new year before reducing them as part of the new promotion.
Ireland East MEP Mairead McGuinness said there appeared to be a "yo-yo effect" in relation to Tesco's pricing policy.
"It is extremely difficult for consumers to keep track of movements in prices and to know whether they are actually getting real value when they shop," the Fine Gael MEP said.
Ms McGuinness is the chairwoman of a retail group set up by the European Parliament which is working to bring about greater transparency in pricing. She challenged Tesco to state who carries the cost of the "special offers" to consumers.
"It would be important for consumers to know whether Tesco actually takes a reduction in its profit margin, in favour of offering value to consumers or whether Tesco, because it is a very large retailer, puts pressure on its suppliers to supply goods at lower cost," she said.
Ms McGuinness said the pressure applied to retailers could be "relentless" and said it was "time that consumers would get full transparency in pricing".
She said that while consumers welcomed lower prices "provided they are real and meaningful" they also deserved to know "who carries the cost of Tesco's apparent 'generosity' to consumers".
Some of the products which the retailer has highlighted in its new price-cutting campaign are now more expensive than they were at the beginning of the year.
At the end of December, a range of Tropicana orange juice was selling for €2.28. Its price went up to €2.59 at the end of January before being marked down to €2.49 as part of the new price campaign, making it 21 cent more expensive now than it was 12 weeks ago.
Flahavan's Progress Oatlets cost €1.95 at the end of last year. The price increased to €2.05 in the middle of January and then fell to €1.99 as part of the promotion. The product now costs 4 cent more than it did the beginning of the year.
In stores today, 500g boxes of chunky cod from Donegal Catch cost €5.99, which, Tesco says, is down from €6.59. However at the beginning of this year, the product cost €5.99. It increased in price in the middle of February.
In response, Tesco said there had "invariably been some price increases in recent months due to inflationary pressures from world commodity markets which have been well documented. These changes have impacted on all retailers and consumers worldwide, not just Tesco. The post-Christmas period has also seen the ending of a number of promotional cycles with consequent increase in all retailers".
Ms McGuinness said commodity prices were increasing, as were costs of production but that "consumers need greater transparency in pricing policy" during such times. "The power of the retail sector is significant and many suppliers feel unable to speak out about their relationship with major multiples for fear of being dropped."
She said that very often it was the "suppliers who are forced to take a reduction in their supply price, in order to fuel the price war between supermarket chains".
