Fruit and vegetable growers, pig and poultry farmers and liquid milk producers will go out of business if the Government does not take action to curb the power of supermarket chains, the Oireachtas Committee on Agriculture has heard.

The committee has previously heard denials from several supermarket chains that they demand "hello money" or payments from suppliers to keep their products on the shelves but IFA president John Bryan said he had heard of many examples of this.

He heard demands for “substantial contributions” from the horticulture sector around Christmas time. If they did not comply they ran the risk of being delisted.

Producers were afraid to make a complaint in case they got a phone call to say their vegetables were being dumped. “That’s very intimidating.”

Mr Bryan said that almost 80per cent of the Irish retail grocery trade was controlled by Tesco, Musgrave and Dunnes Stores, so this concentrated buying power in the hands of a small number of very powerful retail groups.

He urged the committee to support calls for the urgent regulation of the retail sector with a statutory code of conduct.

The same call was made earlier by Paul Kelly, director of Ibec's food and drink industry Ireland group. He said food companies and producers were seeing increasing pressure on margins and escalating costs in retailers' supports.

Some supermarket chains have backed the plan for a voluntary EUcode of practice but Mr Kelly said efforts were made to introduce a voluntary code in Ireland and the process was unsuccessful.