An investigation by the Director of Consumer Affairs, Ms Carmel Foley, has found that Superquinn breached the Groceries Order Act when it asked its suppliers to make "support payments".
Ms Foley has threatened the company with High Court proceedings if it does not immediately "desist" from the practice and she has given Superquinn until April 9th to give "undertakings" that it will no longer ask suppliers to make such payments.
Ms Foley's findings contradict repeated statements by the managing director of Superquinn, Senator Feargal Quinn, that the company was not in breach of any legislation by asking suppliers to make "support payments".
"We have sought legal advice and we are sure we are inside the law," Sen Quinn said. He was not available for comment last night, although a company spokeswoman said Superquinn would consider the results of Ms Foley's investigation next week.
Ms Foley launched her investigation after suppliers told RTE News they had made payments to Superquinn when it opened its new store in Dundalk, Co Louth.
Ms Foley's investigation concentrated on a company called Retail Logistics, set up in 1988, shortly after the Groceries Order Act came into operation.
This company is not owned by Superquinn and the two directors are Mr Brendan Rooney and his wife Carmel. Mr Rooney is a former director of Superquinn.
This company collected most of the "support payments" from suppliers and then Superquinn charged Retail Logistics "management fees" for services it provided, Sen Quinn told The Irish Times when the original allegations emerged.
He said the creation of Retail Logistics was "a formula" which would keep Superquinn within the law.
In her statement, Ms Foley asked Superquinn and Retail Logistics to desist from the practice of seeking support payments.
Last night Mr Michael Campbell, the chief executive of RGDATA which represents independent grocers, said he was not surprised that Superquinn was judged to have "breached" the Groceries Order Act. However, he said it was "not good enough" for Ms Foley to seek undertakings from Superquinn herself.
THE Director of Consumer Affairs has said that an investigation by inspectors from her office into overcharging by retailers had found a "low level" of the practice.
She said inspectors visited 70 outlets, checked more than 2,500 items and found evidence of overcharging in respect of 27 items and undercharging on five more.
"In the light of the many thousands of items carried by most supermarkets, the low level of overcharging revealed by the checks is encouraging," said Ms Foley. However, she said all instances of overcharging would be followed up.
Among the retailers visited by Ms Foley's inspectors were Tesco, Dunnes Stores, Superquinn, Roches Stores, Londis, Iceland, Spar, Super Valu and some smaller independent retailers.
