Senator Feargal Quinn admits that some people may think his "halo" has slipped over the last week as he finds himself in the unaccustomed position of sustaining damaging publicity for the first time in a career spanning almost 40 years.

The Superquinn chief, who built his reputation by "crowning the customer" and projecting a squeaky clean image of both himself and his company, was forced to appear on television on foot of allegations that he sought hello money or support payments - depending on your definition - from his suppliers.

It has been one of the toughest weeks of his career, he says. He concedes that he handled the initial issue "badly" and believes the public's perception of him and the retailing business exacerbated the situation.

"I have an image of being all smiley. But this is a tough business, and when Superquinn goes into negotiations we have to get the best deal for us," he says.

Sitting in his office in advance of his appearance before yesterday's meeting of the Oireachtas Joint Committee on Enterprise and Small Business, Mr Quinn said he was worried the allegations made in the last week might damage the trust formed between the company and its customers.

Back in 1990 Mr Quinn conceived the "boomerang principle" - getting the customer to come back to the store - and he says this could apply to the current controversy. "When you have as public an image as I do, it can work in reverse and come back to hurt you."

But he says the essential element of the public relations strategy which has served him well so far - engaging with the media and the public - will continue.

Mr Quinn admitted in his book, Crowning the Customer, that "the PR spin-off from the top man rolling up his sleeves can be valuable" but he says the current controversy is different.

"We have always worked closely with our suppliers and they have grown with us, which is why much of the comments have been unfair."

However, he agrees that many of his competitors are smiling at his discomfort. As one of them put it this week, "it was like finding out Santa Claus wasn't real".

While the issue of hello money is nothing new to those in the retailing business, the episode has exposed the previously murky relationship between suppliers and retailers to public scrutiny.

The practice involves a retailer seeking a payment from a supplier in return for stocking goods in his store. The payment can take the form of money or a discount off the normal price of the goods. Mr Quinn points out that unlike many of its competitors, Superquinn is a family-owned Irish business and has been promoting small and medium Irish firms for many years while fighting off foreign invaders.

As far as he is concerned "support payments", are about two things - "helping suppliers increase their business and keeping prices low".

While talk of payments from suppliers, some totalling several thousands of pounds, may not sit comfortably with the company's well known pledges of giving value for money, he claims the issue is not properly understood.

He says he has "no problem with suppliers supporting a store" and in the end the competitive nature of the retailing industry makes it necessary.

He calls the current law, the Groceries Order Act, which outlaws "hello money" payments "illogical" and makes the charge that British retailers are not bound by laws prohibiting either hello money or support payments. He says the company once considered setting up its buying operations in Newry to enable it to bypass the law.

"We have always had suppliers supporting our stores, because they are the ones who benefit from any investment we make in a new store as we increase the business we do with them," he says.

He claims that Tesco Ireland has no "real buying operation" in the Republic and most Irish suppliers' contracts are hammered out in Britain. However, Tesco has repeatedly stated that all Irish suppliers deal with the Dublin office of the company and that it has never sought support payments or hello money from anyone.

"We are hobbled by a law which does not affect many of our competitors and that is the bottom line," Mr Quinn says.

"You have four companies - Lidl, Iceland, Aldi and Marks & Spencer - from outside who buy almost nothing in this country and that has to be borne in mind," he argues.

"If we can get suppliers to help us in the investment for a new store, we can sell goods cheaper to consumers and provide state-ofthe-art stores like the one in Dundalk," he says.

When the 1987 Act was introduced by the then minister for industry and commerce, Mr Albert Reynolds, Mr Quinn says Superquinn had to find "a formula" where suppliers could continue to support the company and stay within the law.

This formula was the establishment of Retail Logistics in 1988, a company to which suppliers made their payments.

The company is not owned by Superquinn - the two shareholders are a former Superquinn director, Mr Brendan Rooney and his wife Carmel - and Mr Quinn is not a director.

However, this company, which collects the "support payments", pays "management fees" to Superquinn for services it provides to the company. Mr Quinn says Superquinn has taken legal advice and this arrangement puts the company within the law. But he declines to discuss specific details of it.

Accounts for 1997 and 1998 for Retail Logistics have not been lodged with the Companies Office. According to the 1996 returns, the company's reserves show accumulated profits of £43,023 (€54,628), down from £136,077 the year before.

The company had debtors in 1996 of £256,893, significantly down from £698,405 the year before. The dealings of this company are expected to be examined by the Director of Consumer Affairs, Ms Carmel Foley, as part of her investigation of the issue.

The use of Retail Logistics has been criticised within the retail industry. Mr Quinn insists that Superquinn needs a formula to get around an "illogical and crazy law" - a law which he is lobbying hard to have changed. One suggestion which he says he resents is that cash was paid by suppliers. "I have to clear up this reference to requests for cash; these were cheques which were paid," he says.

"In addition, tax has been fully paid up on every single benefit or payment that has ever been received," he adds. Another allegation he denies is that Superquinn asked suppliers to fund trips abroad by the company's executives.

He rejects the image of small embryonic businesses being squeezed by a large multiple. "We never ask for payments from suppliers just starting with us and the payments are done on the basis of negotiations, not imposed by us on suppliers," he says.

Asked if the current regime of "support payments" will apply when Superquinn opens new stores in the next few years in Bray, Limerick and Waterford, Mr Quinn says "we will have to wait and see".