Ireland's food industry stands to lose 20,000 jobs if discount supermarkets like Aldi and Lidl increase their market share, a conference aimed at smaller retailers heard yesterday in Dublin.

The retail summit - titled "Discounting the Future" and organised by ShelfLife, a magazine targeting smaller retailers - examined the impact of the low-cost German supermarkets on Ireland's indigenous food industry.

IBEC's food and drink's federation director, Mr Ciaran Fitzgerald, predicted up to 20,000 redundancies if either the German supermarkets boosted their market share in Ireland - currently estimated at 4-6 per cent - or the ban on below cost-selling was eased.

Pointing out that 80 per cent of the €8.4 billion food retail spend in Ireland was circulated back into the local economy, Mr Fitzgerald argued that discounting competitors entering the sector "needed to be underpinned by a level playing field".

He said the business strategies of discount supermarkets, such as Aldi and Lidl, were damaging to Irish businesses and Irish jobs because they had no commercial contact with the local market.

Aldi and Lidl's successful incursion into the market has taken some retailers by surprise. According to a recent report by Taylor, Nelson, Sofres, the lure of cheaper products is proving immensely popular to shoppers and it described the German discounters as "a credible threat to every mainstream retailer outside of Dublin".

Mr Fitzgerald said he was anxious not to present IBEC as against competition but argued that the high cost bases faced by Irish retailers meant that Aldi and Lidl had an unfair advantage.

"The problem is Irish businesses are coping with significantly increased costs, such as insurance and electricity. At the same time, businesses which aren't exposed to any of these costs are driving down prices and the end result will be that companies and jobs will go."