Small Irish wholesalers are set to feel the pinch under a new sliding price scale to be introduced by the drinks giant from tomorrow. The new terms favour the biggest buyers in the country, with a sliding scale of discounts based on volume sales of brands including Smirnoff vodka and Guinness.

Under the new terms Diageo's largest customers, which include Tesco and drinks wholesaler Gleesons, are set to benefit from maximum discounts of up to 12% on their orders. Diageo's stated rationale for introducing the new sliding scale is that it simplifies the ordering process and gives greater transparency to customers.

The new terms will apply to Diageo's Irish products across the board, putting an end to the practice whereby salespeople from Diageo's various divisions, including Baileys, Guinness and UDV, all had different terms and criteria for offering discounts to large customers. A spokesman for Diageo Ireland said the introduction of sliding price scales followed "best practice internationally".

There are fears, however, that the new pricing regime will work against small, independent retailers and wholesalers and play into the hands of the larger multiples and distributors.

One drinks industry source said the move had created a "major panic" as it would effectively "phase out the smaller wholesalers in the market place". He said the new pricing regime would give a "huge competitive advantage" to large players, which could use the new volume discounts to drop their wholesale prices on leading drinks brands such as Guinness, Smirnoff, Bailey's Irish Cream and Bushmills whiskey to win market share.

RGData, the group which represents small retailers, said thus far its members have adopted a "wait and see" approach and it had not yet received any complaints.

RGData director Tara Buckley said she expected other suppliers to alter their terms to favour bigger customers in the wake of the abolition of the ban on below cost selling.

RGData was staunchly opposed to the removal of the ban on the basis that it would unfairly benefit large multiples against the interests of its members by allowing predatory pricing.

The Diageo spokesman said there had been a certain amount of "disquiet" over its new regime. "Some smaller customers have raised issues or concerns, " he said.

"Any sort of change tends to get concerns. Our customers are accepting it. . .

There was some [disquiet] but we believe we've resolved it all. The overwhelming response was that this is a positive."

He said the new terms had been introduced to replace a complex set of pricing terms and discounts which had previously been in place. The company feels the new terms represent a "clear and transparent set of criteria" by which Diageo offers discounts to its customers.

The company has also introduced new criteria on the level of sales and marketing, including in-store displays and promotional materials, which it provides to retailers and off-licences.

"We are incentivising sales growth and seeking retailer support behind our brands, " said the spokesman.