Restaurants:UK coffee chain, Costa is getting ready to take on Starbucks in Dublin's city centre - and the country's local coffee barons could be the first casualty. Gretchen Friemannreports.

The struggle for market supremacy in Ireland's fiercely competitive coffee shop sector is likely to heat up over the next few years as the UK's largest café chain, Costa, finally turns its attention to Dublin's city centre.

Up until recently Costa had concentrated its Irish expansion plans outside the capital, leaving arch-rival Starbucks to establish its frappuccino culture in the heart of Dublin, where coffee sales are highest.

However the two international giants are now squaring up for a fierce turf war that could leave many indigenous brands battling to maintain market share.

Within the next few months Costa will open its first high profile outlet in Dublin while Starbucks is starting to span out across the capital's suburbs and the commuter belt counties of Wicklow, Kildare, Meath and Louth.

At this stage the combined number of outlets controlled by the two companies still amounts to a fraction of the stores operated by the leading home-grown player, O'Briens, but property experts claim it may only be a matter of time before the power balance shifts in favour of the multinationals.

They point out that the empire building tactics of Starbucks and Costa hinge upon market domination.

So when the Seattle-based chain opened its first UK outlet in London just under 10 years ago, the company maintained a ruthless expansion rate until it achieved pole position as the country's largest coffee house brand.

There are now 540 Starbucks outlets in the UK. According to the US giant, Londoners are never more than five minutes away from a Starbucks store.

In past 12 months however, the chain has lost its sector lead with Costa, which is owned by a British leisure conglomerate, now ranked as the top market player with 555 outlets.

Both chains operate less than 20 shops in the Republic. But the pace of expansion is beginning to accelerate. Costa intends to more than double its 16-strong network of cafés within the next three years and claims it will have 20 outlets in the Republic by Christmas.

The chain's Irish operations have been franchised out to Tuli Holdings, which also runs the KFC, Pizza Hut and Jean Scene brands here.

The Scottish-based firm is investing up to €20 million to establish Costa's identity north and south of the border and the chain now has 25 outlets on the island of Ireland.

According to Michael Conroy, a property director with Tuli, Costa has deliberately taken its time building up a network in the Republic and said this has given the chain an opportunity to "assess the impact Starbucks has had on the indigenous brands. We could have rushed into the Dublin market but now we have the benefit of knowing how all the brands operate and where they are looking to locate".

He added the punitive rent levels in the capital mean you have to approach potential new outlets with "extreme caution".

Sky high rents have also been blamed for Starbuck's sluggish expansion rate. So far the chain has nine outlets in the Republic, with a further three being fitted out.

However property sources claim the company has at least half a dozen further properties under negotiation.

Market commentators believe the new Dawson street store, in the former E-bookers shop, will test the local competition's resilience to the multinational as it will be Starbucks's first store in the heart of Dublin's café quarter.

As one source predicted, rival brands will "either fight their corner or end up selling out to Starbucks".

In the US the corporation has been attacked for deploying tactics such as "cluster bombing" where, according to anti-globalisation activists, the chain opens several stores to establish its market dominance and squeeze out smaller players.

So far however there has been no evidence of such a strategy in Starbucks' Irish division.

But rival chains are increasingly worried by the expansionary ambitions of the two corporate coffee titans.

Brody Sweeney, the entrepreneur-turned-politician, and founder of the O'Brien's sandwich bar empire admitted the market has become "horribly competitive".

He said that while he would distinguish the O'Brien's business as a "food-focussed coffee provider, rather than a coffee-focussed food provider" like Starbucks and Costa, there were increasing signs of market saturation.

According to Mr Sweeney, one of the most competitive areas is the Mespil Road, Baggot Street strip where around 25 coffee and sandwich outlets, including Starbucks, are trading against each other.

In London the battle between the two corporate heavyweights resulted in smaller chains struggling to sell enough cappuccinos to cover the expensive rent bills.

If Costa and Starbucks transplant that same turf war to Dublin, the cash rich invaders are unlikely to number among the casualties.