Tesco's Sir Terry Leahy has been accused of "paying himself £10m per annum while his company rips off Irish consumers" through overcharging.

The claim was made in parliament in Dublin last week by Labour Party leader Eamon Gilmore, who alleged Tesco was charging up to 50% more for groceries in its stores in the Republic than it did at branches in Northern Ireland. The prices, he said, were not only unjustified but inexplicable given the value of sterling against the euro was at an all-time low, having fallen 20% since last autumn.

"If these rip-offs are not curtailed by the retailers responsible, then the government has a duty to take action," said Gilmore.

Taoiseach Brian Cowen acknowledged the issue was a cause for concern at a time of rising inflation, and said the National Consumer Agency had been asked to investigate why consumers were not benefiting from the currency differential.

An RTE Radio survey compared prices in a Tesco store in Dundalk, in the Republic, with those at Tesco in Banbridge, 25 miles away in Northern Ireland. On a basket of 16 everyday items, from cornflakes and coffee to eggs and babyfood, shoppers in the Republic paid €11 more.

Retail Ireland, the trade body for major retailers, said the higher cost could be attributed to the fact that doing business in the Republic was more expensive, with higher costs for transport, waste collection, insurance and labour.

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