Boots the chemist chain intends to reduce its existing Irish suppliers from 60 to 35 over the next year.
The company inherited 80 Irish suppliers when it took over the Hayes Conygham Robinson (HCR) chain in January for £13 million, but has reduced this to 60 and is currently holding discussions with this group.
However, it says many of the 60 suppliers are unsuitable because they cannot provide an adequate volume of goods or supply stock suitable to Boots stores.
It says discussions with the suppliers will be concluded in April and the agreement will then be phased in gradually.
The company's future plans were disclosed last night when senior management appeared before the Oireachtas Joint Committee on Enterprise and Small Business.
The company says measures aimed at rationalising its distribution network in the Republic will also mean using less Irish contractors. This may cause some job losses, said the general manager for Ireland, Mr Clive Stanley, but he added that they will be "extremely minimal".
He said while the number of suppliers will be reduced overall, those who remain as suppliers with the company will see their orders increasing by up to 85 per cent.
The chairman of the committee, Mr Ivor Callelly, said the disclosures by the company were "very concerning" and he said a promise by Boots six months ago that Irish suppliers would be given access to its stores in Britain had not materialised.
Mr Nick Hudson, marketing controller for Ireland, confirmed that the buying department for Boots Irish stores would remain in Nottingham.
Mr Stanley said many Irish suppliers solely distribute goods and do not manufacture them. He said that Irish manufacturers who have been supplying the stores which Boots took over from HCR "have a bright future".
Also appearing before the committee was a delegation from Musgraves which called for the interim directive from the Minister for the Environment, Mr Dempsey, which bans food stores larger than 32,000 square feet, to be "copper-fastened".
