A statutory code to oversee the relationship between Irish retailers and their suppliers would hit competition, increase prices – and “add to the burden” of a sector already struggling in the downturn, an industry body has claimed.

Ireland’s Department of Enterprise, Trade and Innovation (DETI) is mulling the establishment of a code of practice to govern the retail sector.

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The move, which would be similar to that adopted in the UK earlier this year, comes in answer to supplier claims that they are unable to negotiate fairly with retail multiples and would be designed to ‘level the playing field’.

However, Retail Ireland – part of employers group IBEC – said that a statutory code would inhibit competition and harm consumers by keeping prices artificially high.

“The proposed code could easily become a vehicle for protecting supplier interests at the expense of the consumer,” the retailer group argued in its submission to the DETI.

A spokesperson for Retail Ireland added that the proposed code – and the ombudsman which would be established to oversee its implementation – would place further pressure on the sector at a time when it is already struggling with declining consumer spending.

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“In 2008, retail sales fell by their largest drop ever recorded – and consumer spending is expected to fall further still this year. Retailers in Ireland clearly have enough to be dealing with, without the added burden that this unnecessary measure would bring,” the spokesperson said.

The spokesperson also dismissed claims that the code would benefit Irish manufacturers and result in the creation of jobs in Ireland.

“It is more likely that the code would simply force retailers to look overseas for suppliers,” the spokesperson warned.

A spokesperson for DETI declined to comment on the department’s deliberations.

However, the spokesperson confirmed that DETI is also considering proposals for an alternative, voluntary, code of practice.