Superquinn has given an undertaking to stop asking its suppliers for so-called support payments. The Director of Consumer Affairs, Ms Carmel Foley, instructed the company a fortnight ago to desist from the practice or face High Court action.
The company announced its decision to comply yesterday evening shortly before Ms Foley's deadline expired. Superquinn spent several days consulting legal advisers before giving the undertaking.
A two-line statement from the company made no reference to Ms Foley's view that Superquinn had breached the Groceries Order Act by asking suppliers for support payments. A Superquinn spokeswoman refused to comment last night on whether the statement meant the company now accepted Ms Foley's view.
Some suppliers who made support payments, however, are likely to ask to have their money returned, according to Mr Michael Campbell, the director-general of RGDATA, the independent grocers' organisation.
Mr Tom Dolan, who supplied eggs through his company, Drumbawn Farm, has reportedly stated he will be seeking the return of the "support payments" he made.
Superquinn's decision to cease the practice will affect its business significantly, as it will be opening several stores in the Republic in the coming years, including Bray, Limerick and Waterford.
Senator Feargal Quinn told The Irish Times in February that suppliers made a "significant" contribution to the cost of setting up new stores.
The Groceries Order Act states that retailers "shall not receive any payment or allowance from suppliers on the opening of a new retail outlet".
But Mr Quinn maintained that the company had created a "formula" to stay within the law by establishing a company called Retail Logistics shortly after the Groceries Order Act became law in 1987.
This was the company to which suppliers made their "support payments" and Superquinn then charged this company "management fees".
The company is not owned by Superquinn and the two shareholders are Mr Brendan Rooney and Ms Carmel Rooney.
Ms Foley began her investigation after suppliers told RTE News they had made payments to Superquinn when it opened its store in Dundalk, Co Louth.
