Minister for Enterprise Micheál Martin has announced the Government has repealed the Groceries Order, which bans the sale of grocery goods at below cost.
Mr Martin said the Government had "no option" but to revoke the order as it had acted against the interests of consumers for the past 18 years since it was introduced in 1987.
The Minister said it was "an important day for the Irish consumer", adding that the order was "flawed in a whole host of ways". It was difficult to enforce, and compliance with key provisions was only token in some respects, he said.
"There is no evidence that the Order has protected fair competition in the grocery sector and there is substantial evidence that consumers are paying higher prices because of the Order," he added.
He refuted suggestions that the Order would threaten the independent grocery trade.
"We have been told that if we get rid of the Order we will destroy the independents and end up like the UK where, it has been alleged time and time again, that 70 per cent of town and villages have no shop."
"The statistic is wrong and a serious misrepresentation of the real facts. The convenience sector of the grocery trade in the UK is outperforming the trade as a whole. It is the growth sector and turnover is expected to increase by 25 per cent over the next four years," he said.
He appealed to independent grocers not to be 'fooled into thinking that the Groceries Order is protecting you from your competitor. There is absolutely no evidence that it is."
Mr Martin refused to be drawn on when consumers would notice prices falling but said it would be interesting to see how the market responded to the 'dynamism injected into the market by the Order's removal.'
He credited the Rip Off Irelandtelevision programme presented by Eddie Hobbs for having raised public awareness about the Groceries Order, saying that prior to that programme's broadcast last August, many consumers would have been 'unaware' of the issue.
Mr Martin also unveiled a series of proposals to strengthen the Competition Act, 2002, including changes to competition law, to strengthen predatory pricing enforcement to meet the concerns of small shopkeepers.
Tighter regulations to control the practice of "hello money" will also be introduced. Hello money is where retailers receive a non-invoiced payment for stocking certain goods.
The plan follows a period of consultation since the Consumer Strategy Group made the abolition of the Groceries Order a key recommendation.
Moves to abolish the order, which has been in operation since 1987, had been strongly opposed by wholesalers and retail groups representing independent retailers.
Organisations such as RGDATA warned the abolition of the order would lead to the closure of many family-run corner shops who could not compete on price against the bigger supermarket chains.