A reduction in the cap on superstore development from 3,000 sq. m to 2,500 and a proposal that a fee system be introduced for parking in out-of-town shopping centres have been recommended by the Joint Committee on Enterprise and Small Business.

The proposed cap of 2,500 sq. m for trading space is less than that introduced by the Minister for the Environment, Mr Dempsey, in June 1998 by ministerial directive. Superstore development is capped at 3,000 sq. m but draft retail planning guidelines for local authorities recommend a 3,500 sq. m cap for development in the Dublin area while retain the 3,000 limit outside the capital. These guidelines are being examined for the competition implications.

Mr Ivor Callely, the committee chairman, said the minister had been prompted to impose the 3,000 sq m cap by developments which he envisaged would happen. "I think the minister will acknowledge that the figure of 2,500 is the most progressive and realistic," he said.

Change due to the impact of technology and the arrival of overseas competitors was the reality of retail development, he said.

The committee's report is also critical of the provision of free parking at out-of-town centres, saying that car parks at centres of more than 2,000 sq m must be monitored "particularly where such a car park may interfere with other local provisions".

The report recommends incentive schemes to encourage people to shop in urban locations and to redress the imbalance between the cost of providing car parking in city and out-of-town centres.

"The Government should consider introducing a fee system for parking in out-of-town centres. This fee should be levied against the operators of the edge-of-town centres and be linked to their car parking capacity."

The retention of the Groceries Order, which outlaws practices such as below-cost selling, boycotting of suppliers or charging them so-called "hello money" is also recommended. Ms Nora Owen TD, a committee member, said the Monopolies and Mergers Commission was due to rule on the legality of the order this week, but the committee considered the order "necessary in the context of Irish trading practices".

The report also states that new retailer entrants should be required to have "a real purchasing office" which should be monitored. The committee has been examining the impact of superstores on the retail grocery trade since February 1998.

IBEC welcomed the report yesterday, saying that retention of the Groceries Order would contribute to a structured, competitive market. "The last 10 years have seen tremendous development in terms of choice, quality and value for money, largely through the existence of the Groceries Order," said Ms Ailish Forde, assistant director of the IBEC-affiliated Food, Drink and Tobacco Federation.