No reliable evidence exists to prove that Irish groceries are more expensive than those sold in northern European Union countries, an Oireachtas committee has declared.
Opposing an end to the ban on below-cost selling, the Oireachtas Enterprise and Small Business Committee said it encourages competition and "prohibits predatory pricing".
The EU's statistical agency, Eurostat, reported in 2003 that Ireland was the most expensive country in the union for groceries.
However, the Oireachtas committee said Irish prices should only be compared with those in France, Germany and other northern European countries and not with those in Spain and elsewhere, where wages were lower.
"If this comparison is made, Irish prices are likely to be found to be comparable to those in other countries," the committee said in its report.
Eurostat only gathered price figures in Dublin, and included international brand name alcoholic drinks that are more expensive here because of Government-imposed excise duties.
Using the Eurostat figures, the Government-appointed Consumer Strategy Group (CSG), which was chaired by Anne Fitz-gerald, recommended in May that the ban on below-cost selling ban should be ended.
Then, the Minister for Enterprise, Trade and Employment, Micheál Martin, said the CSG's analysis that the Republic is "amongst the most expensive" for "a whole range of consumer goods and services was very persuasive and compelling".
"If the ban goes, the market will become more concentrated with less competition.
"If the ban goes, supermarkets will grow at the expense of specialist retailers. Selling below cost is an unfair trading practice that distorts the market," said the committee, chaired by Fianna Fáil TD, Donie Cassidy.
The German supermarket chains Aldi and Lidl would not have been able to enter the Irish market if the below-cost ban had not been in place "because they would have been subject to attack by existing multiple groups".
However, the Oireachtas committee urged the Competition Authority to investigate the profit figures of Dunnes, Tesco, Superquinn - none of whom currently reveal their Irish sales margins.
Recently, the Minister for Finance Brian Cowen revealed that the major multiples last year paid €164 million in corporation tax - which shows that their combined profits exceeded €1.3 billion.
The committee expressed "concern about the high market shares" held by Tesco and Dunnes, though it noted that Supervalu and Centra, owned by Musgraves, also had a significant share.
The principal beneficiaries of lifting the ban on below-cost selling will be Tesco and Dunnes, "while independent retailers and symbol group retailers will lose business, or cease business".
Despite complaints from consumers about high prices, grocery prices have actually fallen by 1.4 per cent in the year to June, while the annual inflation rate since August 2003 has been less than 1 per cent.