Supermarket giants must explain massive price differences for the same goods sold on either side of the border, the Government warned today.
Enterprise Minister Mary Coughlan said while prices have fallen in the South, it was still a lot cheaper to buy a basket of groceries in the North than in the Republic.
The minister was speaking after a meeting with the National Consumer Agency (NCA) which has been encouraging greater competition between supermarkets.
An NCA survey in June found consumers were paying more than 30% more for branded goods in the Republic than in the North.
Ms Coughlan said she commissioned a study of the cost of doing business in both jurisdictions to get to the bottom of the price differences.
"While retailers have said that the cost of doing business in the Republic is greater and that this accounts for the price differential, given the appreciation of the euro against the sterling over the past year, I have asked the national policy and advisory board, Forfas, to assess the relative cost of doing business in both jurisdictions," she said.
"I think it's important to give a very clear message. There has been a reduction in prices."
Figures from the Central Statistics Office today show inflation has fallen back to 4.4% as consumers paid less for food and clothes last month.
Ms Coughlan said high grocery prices impacted on household budgets and that the Government was determined to get shoppers a fair deal.
"Part of ensuring that we have value for money is that things that are hugely important to people on a daily basis, like groceries and clothing and footwear, are at a reduced level and that is why we are continuing and very strongly giving a message to retailers that we are constantly going to survey," she said.