RETAIL: FOOD AND Drink Industry Ireland, an Ibec group that represents the food industry, has warned removing the current cap on the size of retail shops could harm the Irish food industry.

In a policy document to be published today, the group also warns other Government proposals, such as the possible introduction of a sugar and packaging tax, were “at odds with the established goal to grow exports by 42 per cent to €12 billion by 2020”.

“We need an unambiguous and unwavering commitment from Government that it will not apply discriminatory taxes to food and packaging,” said the group’s director Paul Kelly.

Under the terms of the EU-IMF bailout, the Government is obliged to consider removing the limits of the size of new out-of-town shopping centres and supermarkets. Draft guidelines published in November by Minister for the Environment Phil Hogan included proposals to increase the size of allowable retail floor space from 3,500sq m to 4,000sq m in the Dublin area and to exempt retail warehouses in certain cities and towns from the current cap of 6,000sq m.

Commenting on Government proposals to consider the introduction of taxes on packaging and sugar, the industry group said such taxes were “regressive by nature” and “inappropriate in an existing high-tax environment”.

While forecasting another strong year for the Irish food and drink industry in 2012, the group said challenges remained, particularly due to volatile commodity prices.

An increase in food prices last year was partly responsible for the surge in food exports from Ireland in 2011. An increase in the volume sold also contributed.