ADM Limited, the company that operates the co-operative retail chain Londis and Londis Topshop, yesterday admitted it was "concerned" over the possible abolition of the ban on below-cost selling.
Speaking to The Irish Times after the company's a.g.m. in Galway, chairman Mr Leo McAuley said the reduction or abolition of the Groceries Order would ultimately "favour the larger players".
However, he claimed the convenience store focus of his company could offset the impact of such unfettered competition.
"Our stores really attract people who are on the move rather than the bulk-buying shoppers looking for a good bargain. The deli counters are playing an increasingly important role in the convenience market and so we believe the structure and focus of the company can shelter us a wee bit from the larger discounters," he said.
Earlier this month, the Tánaiste, Ms Harney, signalled she would consider removing the band on below-cost selling in a bid to stem the country's soaring inflation figures.
The Groceries Order was introduced in 1987 to prevent retailers from undercutting the competition by selling products at rock-bottom prices.
But the move of Lidl and Aldi into the retail market has highlighted the demand for discount stores among the public, with recent research stating that the German-owned importers presented a "credible threat to every mainstream retailer outside of Dublin".
ADM Londis posted a 23.7 per cent rise in operating profit for 2002 and although Mr McAuley anticipates a "tougher" year ahead as the economic downturn continues to dampen consumer confidence, the co-op is still forecasting a growth in profit for the end of this year.
He said the group was concentrating on integrating the recently-acquired Londis Topshop convenience stores, which it bought last month from Tedcastle Holdings. The acquisition boosted the number of stores fully operated by the group to 260. But the convenience retail market is becoming increasingly competitive, with both Spar and Centra opening more outlets this year.
Last month there were reports that Spar approached ADM Londis with a view to taking it over. Mr McAuley declined to comment on the nature of the approach but said the co-op had so far not received a "serious offer".
"If we receive any serious offer we will have to look at it and consider it on behalf of our members and shareholders. So far that has not happened," he said.
