Fine Gael claims that profiteering by retailers in recent years has been partly responsible for the State's high inflation have been strongly condemned.
The Irish Hotel's Federation (IHF) said Fine Gael finance spokesman Mr Richard Bruton's analysis displayed "an alarming ignorance"; while the retailers group, RGDATA, said food inflation was well below headline inflation and that Mr Bruton should "concentrate on tackling competition" in sectors contributing to the problem.
Mr Bruton has called for a "name and shame" campaign and a regular price league to counter what he calls excessive profit taking in the retail sector - particularly bars, hotels and restaurants.
He claims increased profiteering has cost over €1,000 per household, valuing the entire cost to the consumer at €1.3 billion per year. His figures are based on a Central Statistics Office (CSO) report on prices charged within the services sector between 1997 and 2001.
His analysis shows the average mark-up in shops increased by 6 per cent to 50 per cent, "most of which went towards profits rather than wages".
Bars showed the highest increase in margins, up 95 per cent; while hotel margins went up 80 per cent and restaurant mark-ups went up 63 per cent.
"All these figures pre-date the Euro-changeover, when a further price mark-up occurred. The implication is clear. The boom years were used for profit taking at the expense of consumers," Mr Bruton said.
But Mr John Power, chief executive of the IHF said: "Mr Bruton has taken a one-dimensional approach to his interpretation of the CSO figures, without even considering the cost structure of the hotel sector and the wider context of the cost of running a business in Ireland."
Hotels cannot be compared to retailers as up to 70 per cent of margins goes on wages, Mr Power said. "When you consider that wages in hotels have increased by an average of more than 10 per cent annually since 1997, it is only through the erosion of profitability and increased efficiencies that the gross margin has only increased by 4.7 per cent between 1997 and 2001," Mr Power added.
Ms Ailish Forde, director general of RGDATA said inflation in the food sector was just 1.6 per cent for this year, more than half the headline rate and far below the 5.6 per cent increase recorded by the CSO for the service industry.
"The CPI [Consumer Price Index] figures are the best and most credible index of competition in our sector. They are certainly a far better basis for analysis than the "Alice in Wonderland" economic calculations presented by some commentators in recent days," Ms Forde said.
There had been "unrelenting increases in operating costs" in the retail sector - particularly in the areas of energy, waste, telecommunications, labour costs, professional fees and insurance, she continued.
"The simple fact is that retailers are continuing to offer low prices against a background of savage and unrelenting increases in operating costs," Ms Forde added.
The CSO figures show farmers get approximately 30 per cent of the final retail price for their produce. But Mr Bruton also criticised suppliers in the food sector saying that while they had cut prices to export markets by 9 per cent, the reduction to the domestic market was only one per cent.
He said the Government was "seriously compromised" on the issue because it was responsible for almost 60 per cent of current inflation. He called for an "independent examination" of retail mark-ups; more rigourous enforcement of price-display requirements including an obligation to show the equivalent price 12-months ago.
Meanwhile, the chief executive of Age Action Ireland, Mr Robin Webster, warned that the rising cost of living is particularly serious for many older people on low incomes and fixed pensions. In the last 10 years the number of older people living in poverty has increased and their numbers will be swelled by the current hike in prices in everyday items, he said.