The introduction of a code of practice for the Irish grocery sector would result in retailers sourcing more stock overseas, according to the Republic's largest independent retail group.

The warning has been sounded by the Musgrave group, which has a 20% share of the Irish market through its SuperValu and Centra franchise chains.

In a submission to trade minister Mary Coughlan, currently considering the establishment of a code to be policed by a retail ombudsman, Musgrave claims such a measure would also lead to extra costs being imposed on retailers, and job losses.

The code, it says, would put Irish-owned stores at a disadvantage to their internationally owned competitors by which it means Tesco, M&S, Lidl and Aldi through reducing their ability to negotiate deals with suppliers.

It adds that the new rules and regulations for the sector, as set out in the consultation document, would, if implemented, encourage retailers to increase sourcing supplies outside the Republic, force up the cost of goods in the Republic and deter new suppliers from entering the market.

Musgrave said it would prefer a voluntary framework agreement similar to that operated by the multiples for the display and sale of alcohol.