The Small Firms Association has called on the Minister for Enterprise, Trade and Employment, Ms Harney, to keep the Restrictive Practices (Groceries) Order 1987 in place after a recommendation to rescind it was made by the Competition Authority.

The SFA director, Mr Brendan Butler, said there was an obligation under the Programme for Government to "make life easier for small business".

A spokesman for Ms Harney said the order was being examined by the Mergers Review Group, as part of a review of legislation in the mergers area. The group is being chaired by Mr Michael Collins SC and is expected to report early in the new year.

Mr Butler said the rescinding of the order would result in the introduction by multiples of extended trade terms and a concentration of the main players in the food retailing sector. "This can only result in a price war developing among the multiplies and small retailers will get squeezed out of the market. . . the short term benefits to the consumer of a price war will be far outweighed by the long term losses to Irish business, Irish jobs and Irish identity if the order is rescinded," he said. The order was originally introduced to ensure suppliers were paid on time and to eliminate below cost selling. It had resulted in the lowest rate of food price increases in any 5-year period since 1947 and a 50 per cent increase in food production, Mr Butler said.

"The removal of the order will spell the death knell for the small retailing and supplier sector. In the UK, with the continued rise of the large multiples, over 8,000 small retailers have closed in the past four years," he said.

He added that it contravened the spirit of the recent agreement the SFA reached with Tesco on commitments to maintain supplier contacts in its take-over of Quinnsworth and Crazy Prices.