The Competition (Amendment) Bill 2005 would enable any large multiple to engage in predatory pricing against a smaller competitor with impunity, Paul Coghlan (FG) said.
The report produced by departmental officials had stated that predatory pricing was already prohibited by the Competition Act where there was dominance.
However, it said that a market share of less than 35 per cent was not likely to be dominant. None of the Irish multiples at national level had a market share approaching 35 per cent.
The Competition Authority had decided in a recent case that a company with a market share of 65 per cent was not dominant.
"The approach by the department and the authority and the Minister is to advance legislation that essentially legalises and institutionalises unfair trading in the retail grocery trade.
"As far as this legislation is concerned, it will distort competition by giving legal protection to the enormous market power of some of the largest players in the grocery market globally," said Mr Coghlan.