TESCO IRELAND has told its suppliers in the UK that it expects them to cut their prices to reflect the recent surge in value of the euro against sterling.

Ireland's biggest grocery retailer yesterday confirmed to The Irish Timesthat it held a meeting with its UK suppliers about two months ago seeking the price cuts.

Since then a number of individual meetings have been held and about half of the suppliers have agreed to adjust their prices while other reductions are in the pipeline.

About 1,250 prices have been reduced at Tesco's 105 stores in the Republic over the past six weeks as a result of this move, the British retailer said.

"We are dependent on suppliers to pass on the sterling differential for the benefit of our customers," said Dermot Breen, Tesco Ireland's director of corporate affairs and communications.

"So far about half of them have agreed to pass on the sterling difference. About half of our suppliers haven't passed them on."

Mr Breen declined to identify the suppliers who have or have not passed on the currency differential.

It is understood, however, that a large number of multinationals have so far resisted attempts by Tesco to get them to reduce their prices.

Sterling's fall against the euro in recent months benefited suppliers in the UK by between 10 and 18 per cent based on what goods they produce, according to the British retailer.

Irish retailers have been under pressure in recent months from the consumer lobby for failing to reflect the currency swing in the prices they charge.

The Government has threatened to take action if retailers do not alter their pricing.

Tesco Ireland sources about one-third of its goods from the UK.

Its stores typically carry about 10,000 grocery items, along with a large range of non-food products.

The price reductions that have been introduced in recent weeks cover a range of items, including groceries, confectionary, toiletries and household products.

"There are a good few more to come," Mr Breen said.

Mr Breen, however, would not comment on what action Tesco would take against suppliers who refuse to drop their prices. Its options include delisting products.

"It affects the relationship," he said.

"Our plan at the moment is to bring them down. We are serious about getting prices down and passing on the difference to customers."