Suppliers in the Irish Republic have called for the establishment of a new ­legal framework to protect them from "coercive practices" being employed by the multiples.

Food and Drink Industry Ireland (FDII), the representative body, claims that large retailers are increasingly sourcing products and brands from the UK, bypassing local suppliers. That could force indigenous suppliers out of business and lead to mass lay-offs, according to Shane Dempsey, head of consumer foods at FDII. He also claims that suppliers, while struggling to survive, are being forced to fund retailers' marketing initiatives and promotions.

The FDII wants the government to order a probe by the Competition Authority to establish that "the power held by certain retailers over some food suppliers is monopolistic". It is also seeking the establishment of a legal framework by government that will ensure fair trading practices between grocery retailers and suppliers, that suppliers are not forced to pay for advertising, display of goods or other promotions, and that the benefits of existing competition are passed on to consumers.

Dempsey said he would outline the FDII's case for urgent action when he appears before a parliamentary committee in coming weeks. Irish food suppliers' problems were compounded by the fall in the value of sterling against the euro, which meant UK-owned retailers could import produce at lower prices while Irish exporters found it impossible to recoup manufacturing costs, he added.

Meanwhile, the multiples face the prospect of another inquiry, this time by EU competition commissioner Nellie Kroes. Irish MEP Eoin Ryan has asked her to investigate why prices in the Republic are not reflecting the fall in sterling and if, "consumers are being ripped off".

A report by state agency Forfas found that, while the cost of doing business in the Republic is higher than in Northern Ireland or Great Britain, it does not justify the price differential being charged by retailers.