Asda has stepped up plans for a move into the Irish Republic following last week’s decision to abolish the groceries order, which bans below-cost selling.
The revelation is likely to come as a further blow for independent retailers, still mourning the loss of the order that has provided them with a level playing field on which to compete against the multiples.
According to property sources, Asda’s search is concentrated in the border counties of Louth and Donegal, close to Northern Ireland, where the retailer already has 12 Safeway stores after acquiring them
from Morrisons earlier this year.
Asda declined to comment, but it is understood the retailer, which has been eyeing the Republic for some time, is viewing the abolition of the groceries order as the removal of the final obstacle to entry. The Irish Small Firms’ Association warned that the arrival of such a major player “will hasten the demise of smaller family grocers”.
Tesco, meanwhile, has welcomed the scrapping of the order as “very good news for consumers” and promised gradual price reductions. “We have reduced thousands of prices over the past few years,” said a spokesman, “and this will enable us to do more of that and at a faster pace.”
Musgrave chief executive Chris Martin, however, has taken a different view, claiming that new competition law may not provide an adequate alternative to the groceries order. This would have damaging consequences for retailers, suppliers and wholesalers - and would also mean fewer jobs, fewer Irish goods sold and fewer choices.
Recent developments in the UK, he said, had highlighted the inadequacy of competition law and “should set the alarm bells ringing for Trade and Enterprise Minister Micheál Martin”.
Dunnes Stores stole a march on its rivals by immediately offering a two-for-one deal on its own label milk after the announcement that the groceries order was to be abolished. However, it appears to have jumped the gun as farmers complained to consumer affairs director Carmel Foley, pointing out that the ban remained in force until the required legislation was passed. Dunnes cut short the promotion.
The legislation will not be in place until Easter next year.
Foley has warned that, until then, her office will continue policing the order and taking action if necessary.
Anthony Garvey