Harney rejected advice on pricing policy

The Tanaiste went against the advice of her Department officials when she decided last September that the ban on below-cost selling should remain in place. Documents released under the Freedom of Information Act show that Ms Harney - who is also Minister for Enterprise and Employment - was extensively lobbied by industry groups and private companies to retain the ban.

Amongst the companies that lobbied for the retention of the Grocery Order was Clayton Love Distribution, the frozen food business controlled by Mr John Mulhern, the son-in-law of the former taoiseach, Mr Haughey. College Trustees, an offshore company that was linked to Clayton Love Distribution is currently being investigated by Mr Gerard Ryan, an authorised officer appointed by the Tanaiste.

His investigation is one of a number instigated on foot of the McCracken Tribunal's discovery of the Ansbacher offshore banking scheme operated by the late Mr Des Traynor.

The most vociferous lobbying for the retention of the Grocery Order came - not surprisingly - from RGDATA which represents the small retailers. Other companies and organisations that pressed for its retention included Musgraves, the Cork-based wholesaler and supermarket operator. The National Federation of Retail Newsagents and Dublin Chamber of Commerce also called for its retention.

They all argued the order prevents larger retailers from embarking on the sort of price wars which would drive small retailers out of business. The order was introduced in 1987 following the collapse of the H Williams supermarket chain following a price war. Ms Harney is the third minister to consider scrapping the order since then, but like her two predecessors, Mr Ruairi Quinn and Mr Richard Bruton, she chose to retain it.

Unlike Mr Quinn and Mr Bruton she had a recommendation to abolish it from an independent body - the Competition and Mergers Review Group. It reported in May and recommended - on the basis of majority decision - that the order be repealed. The department and the Competition Authority both supported the ending of the ban as they felt it was bad for competition and ultimately kept food prices artificially high. Actual increases in food prices over the 13 years since 1987 do not necessarily bear this out but the issue is complex.

In July this year Mr Barry Harte - who at the time was the principle officer in the competition policy section - recommended that the order be revoked and the legislation be introduced to deal with other matters raised by the CMRG. These included banning hello money - the mechanism by which suppliers were expected to contribute to the costs incurred by supermarket chains in opening new stores. A draft ministerial order to amend the Grocery Order to remove the ban on below-cost selling was prepared but never signed by Ms Harney.