Tesco Ireland has described as "utterly malicious and misleading" claims that it increased prices before dropping them in a widely publicised campaign.
The Consumers' Association of Ireland expressed concern at the findings of a Sunday Times survey showing prices of around one-third of reduced-price items had been raised before the price cuts began in May.
However, Dermot Breen, director of consumer affairs at Tesco Ireland, said the survey was "totally misleading".
He said suppliers had increased prices on a range of packaged products around the time of the abolition of the Groceries Order in March.
He said this had happened in all supermarket chains at the same time. As soon as Tesco noticed the subsequent increase in inflation, it told suppliers it would not accept more price rises.
He said Tesco had made a public statement about this at the time and had made no secret of the price rises. "We did not jack up prices to bring them down again. We stopped the price rises and started reducing prices but other supermarket groups kept the price increases."
Mr Breen said Tesco had reduced the price on 5,000 products since May, and had invested "tens of millions of euros" on this campaign. It planned to reduce the price of 5,000 other products by early 2007 so that there would be a price reduction for all 10,000 items previously controlled by the Groceries Order. The price cuts applied to packaged products such as bread, pasta, eggs and breakfast cereals.
He said the abolition of the Groceries Order had helped as suppliers could no longer dictate prices on a range of products.
At the weekend, SuperValu pointed out that it had reduced the prices of hundreds of products by an average of 6 per cent in recent months.
Yesterday Dunnes Stores refused to comment on reports that it was considering cutting the prices of a wide range of everyday products such as bread, butter and milk.
