A French supermarket is set to open on Jersey after a new report paved the way for increased competition on the island.

Research for economic development minister Alan Mclean outlined the benefits of additional competition for the economy and its islanders, 84% of whom favour the arrival of another supermarket.

"Competition will lower prices and costs through increased efficiency and provide more consumer choice," said Mclean.

But the Channel Islands Co-op claimed the analysis was "reworked, regurgitated and totally unbalanced" and gave a misleading picture of the market. "The suggestion we need another supermarket to keep the market competitive and bring down prices for consumers is a complete misnomer," said CEO Jim Hopley. "We're a co-operative as if we're going to be ripping off our customers. The report fails to outline the 3% General Sales Tax on all foods, the fact wage rates are 40% higher than in the UK, or the extortionate building costs. It's overheads like this that impact on consumer prices, not a lack of competition."

A French chain is seen as more likely to enter Jersey than a UK retailer as it would not have to pay GST.

Sainsbury's, Asda and Tesco have all been linked with plans to open on Jersey but denied any moves were imminent.