Supermarkets, suppliers and lobbying groups were all busy last week preparing their submissions on the code of practice for the grocery sector which has been proposed by the Department of Enterprise, Trade and Employment. The closing date for the submissions was Wednesday and 24 submissions were made, including ones from industry heavyweights Tesco and Musgrave.

When it was launched in August, the Tánaiste Mary Coughlan said that the grocery-goods sector in Ireland had been seeing lower prices and better value for consumers. "While this is a positive result, the government also fully appreciates the need to ensure that, in this drive for better value, there is transparency and a balance in the relationships between the various players in the grocery-goods sector," she said. "Any code of practice must have as its key objective the need to achieve this balance between all stakeholders, including suppliers, producers, retailers and consumers."

The announcement was accompanied by eye rolling from much of the sector, particularly given that the department was leaving open the idea of whether to use a compulsory or voluntary code. As the first of eight questions posed in the consultation document, it raised concerns, because Dunnes Stores had opted out of the code on alcohol so there is no guarantee that there will be industry-wide acceptance of a voluntary code, and without the second-biggest supermarket chain in the country, it's debatable whether a code of that type would have any merit at all.

"There is a feeling in the trade that this is a witchhunt against Dunnes and Tesco in particular – the other retailers feel they are going to get caught up in a problem not of their making," said John Ruddy, editor of Checkout magazine. Much of the rancour is between the supplier and the supermarkets. The retailers say that the cost of sourcing grocery goods is much dearer in Ireland than in the UK and elsewhere, in some cases because international heavyweight suppliers attach an "Irish premium". On the other hand, suppliers and distributors believe there is a significant imbalance in the relationship between retailers and suppliers, which could result in bullying and has already resulted in suppliers being squeezed by the increasingly difficult demands being made by retailers.

"There is a more fundamental issue at play here – namely the fact that many Irish retailers are now completely bypassing the indigenous supply base for many products," said Ruddy. "And it has been argued that the introduction of more red-tape will simply exacerbate this issue. I would argue that there is a danger in over-regulation, but the retailers who are cross-stocking did not start doing this because they got fed up with an over-regulated market, they did it because they wanted to buy cheaper product from foreign markets. So unless Mary Coughlan plans to include a fixed exchange rate in her code, I can't see this changing."

Part of the problem in the Irish context is that the market is too concentrated. Asda and Sainsbury's may have increased their share of the grocery market in the Republic by 300% but that was driven by customers fleeing what they viewed as rip-off prices, and even still it represents a tiny amount of the market. If Asda had completed its mooted purchase of Dunnes and Sainsbury's had followed through on its interest in Superquinn, then the market here might have altered fundamentally. Asda has already said it will consider a home-shopping service in the Republic but that is likely to be limited in delivery area, thereby limiting its impact. And the government's unwillingness to allow hypermarkets means others are unlikely to see the point in entering the market here.

As a result, there have to be questions about what the code will achieve. It can't hurt the retailer and if a relationship goes wrong can it really save a supplier who has so much business riding on one customer?

"It's all well and good to suggest that the promise of anonymity will encourage aggrieved parties to come forward and complain," said Ruddy. "But with Ireland such a small country, how could this be guaranteed? Everyone on the supply side wants a 'white knight' to come along, expose the bad practices, and name and shame the offending parties – the problem is that no-one wants to be that white knight."

One key area where this can be seen is in 'hello money', whereby a supermarket demands to be paid by a supplier before its goods will be stocked. Fine Gael claimed that some suppliers are paying up to €1m in hello money each year and that up to €160m in total is being paid to large supermarket chains by Irish suppliers. Legally it's a difficult issue. While hello money is banned here, non-contractual demands are not and suppliers "must meet these demands without public protest because of the fear of being delisted by a large retailer that could mean a loss of up to 30% of business in some cases", according to a document from Food and Drink Industry Ireland (FDII), which was revealed by the Sunday Tribune earlier this year.

In the end, it'd be no surprise if there is a token effort to have some controls in relation to key cupboard staples while the ever-ready crutch of alcohol is there if a distraction is needed. Last week, a report in the British journal Clinical Medicine suggested that scrapping cut-price supermarket alcohol would result in families paying less for their groceries. It suggested a minimum price of 50p per unit would reduce alcohol sales and force supermarkets to use price promotions on other products.

Of course, the experience in Ireland is completely different, because controls banning below-cost selling of alcohol were in place as Irish grocery prices soared to extortionate levels. It is almost certainly coincidental that as alcohol prices fell in supermarkets following the abolition of price controls, the price of groceries fell too but it goes to show the eccentricities of concentrated markets.

As a result, resolving the issues between the suppliers and the supermarkets is only beginning.