Chemists are not trying to fix drug prices in their dispute with the Government over deregulation of the business, the Irish Pharmaceutical Union claimed yesterday.

The union said in a note to the Competition Authority that it was threatening industrial action not collective action to seek a reversal by the Government of its decision to liberalise the sector.

A vote in favour of industrial action by members of the union led the Competition Authority to threaten a legal move against the IPU if its members took "collective action" to withdraw their services.

The union said it was "quite surprised" by the authority's threat. Its legal advisers said any industrial action would not be planned with the intention to prevent, restrict or distort competition.

Given the dispute with the Government, industrial action was legitimate.

The legal advisers, who were not named, said: "We hereby place you on notice that our client will take such action as it considers necessary to protect its members' interests, in this matter and in any other matter which affects our client's members.

"Should you have difficulty in this regard, you are free to serve upon this office High Court proceedings."

They added: "Given the significance of this issue, it is submitted that if and when you commence such proceedings, that they be dealt with by way of full hearing rather than an application for interlocutory relief.

"Such an application would, of necessity, be dealt with on affidavit and would not allow for a full examination of the issues involved."

A spokesman for the Competition Authority said it had no comment to make on the statement.

The Irish Pharmaceutical Union has claimed the Government's decision in February to deregulate the sector was "high-handed" because the work of a review commission examining the sector was not yet complete. The Government said it was obliged to revoke the regulations because they were ultra vires.

The move followed a highly critical Organisation for Economic Co-operation and Development report last year on low levels of competition in various sectors, among them the pharmacy business.

It removes limits on the number of State contracts to distribute drugs that can be operated in particular areas.

But while industrial action has been threatened, a withdrawal of services is considered unlikely before the review commission reports in the autumn.