Renewed fears of Irish suppliers being bypassed by foreign-owned retailers establishing branches in Ireland are being investigated by a member of the Oireachtas Committee on Enterprise and Small Business.

Senator Mary Henry has said she will present a report to the committee next month on the effect retailer entrants were having on supply chains. "They all say they are going to use Irish suppliers but we have had a lot of complaints from suppliers here," she said.

The State faces the prospect of a new round of European food retailers, such as Lidl, Aldi and Netto, entering the market as low-price operators.

Within the last year Lidl, a German-owned private company, set up a Dublin office aimed at sourcing sites for the company. It has already gained a substantial presence in Britain with 118 stores and is also believed to have an interest in a Northern Irish presence.

Mr Patrick Kaudewitz, of Lidl Ireland, would not comment on the company's strategy yesterday, saying it was policy not to disclose information to the press.

But he recently told the Oireachtas committee that Lidl was seeking sites close to town centres of about 1,000 sq m, well below the national cap of 3,000 sq m outside Dublin. Lidl specialises in own-brand products and would thus have much fewer product lines than a typical Tesco store, which has 20,000 lines.

Mr Michael Campbell, of the grocers' group RGDATA, said the commitment of entrants to Irish suppliers had to be questioned and shoppers should vote "with their feet" if those commitments were not kept.

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