Dunnes Stores will ask the High Court next week to rule that babies' nappies should not be protected by the ban on below-cost selling.

The Republic's biggest retailer plans to challenge the Director of Consumer Affairs' right to prosecute it for offering disposable nappies for below their wholesale price as part of a special promotion.

It is illegal to sell groceries for less than their wholesale cost. However, the definition of groceries in the order is not clear. It describes them as "household necessities" normally sold by grocers. It excludes fresh produce.

The Director of Consumer Affairs, Ms Carmel Foley, told the Oireachtas Committee on Enterprise and Small Business yesterday that when her office last year tried to prosecute Dunnes in the District Court for selling the nappies below cost, the company's legal team challenged its right to do this on the basis that nappies were "not groceries".

The High Court is due to hear the case next week. Ms Foley said that at the same time, another case, which will decide if the use of discount vouchers breaks the law, is also due before the court.

Her office successfully prosecuted Dunnes and Tesco last year for a breach of the ban, when they offered discounts on a number of baby food brands as part of a special promotion. The committee is investigating the high retail cost of food in the State, and is assessing the impact of the Groceries Order, which bans below-cost selling.

Ms Foley also told the committee that inspectors from her office regularly encountered situations where producers and suppliers were charging the big supermarket chains far less for some goods than the price they charged smaller operators.

She refused to comment directly on the order banning below-cost selling on the grounds that her office enforces it and prosecutes retailers for breaking it. However, she pointed out that the order did not rule out competition in the goods to which it applies.

"There's nothing to stop people from selling at cost for example," she said.