Ireland has the highest prices for alcohol and tobacco products in the EU, with prices last year 70% higher than the EU average.

Eurostat, Europe’s official statistics agency, says alcohol and tobacco prices were highest in Ireland with Bulgaria and Romania the lowest at 64% of the average price.

Most of the price variation between countries for alcohol and tobacco is due to different taxation.

Food and non-alcoholic drinks in Ireland were the second dearest in Europe behind Denmark, which has prices 20% higher than average.

Overall, Ireland had the fifth highest prices for consumer goods - 18% higher than the EU average.

Prices for hotels and restaurants in Ireland for 2010 were third highest in Europe, behind Denmark and Sweden and on a par with Finland.

In the area of personal transport equipment, Irish prices were 16% higher, third highest in Europe behind Denmark and Portugal.

However, Ireland was slightly below the EU average in two areas, with clothing at 95% and consumer electronics at 94%.

Retail Ireland, the IBEC group that represents the Irish retail sector, said the fall in Irish grocery prices shows how retailers have responded aggressively to the new economic climate, but more needs to be done.

Its director Torlach Denihan said that Irish labour costs, service charges and rents remain among the highest in Europe.

'Government must take decisive action to get the Irish cost base back into line with the rest of Europe by measures such as the abolition of the Retail Joint Labour Committee and early legislation to reduce retail rents.'

Meanwhile, IFA President John Bryan said the findings confirm that the food supply chain in Ireland remains broken.

'Ireland remains the second highest priced country in the EU for food and non-alcoholic beverages, with consumer price levels 20% above the EU average in 2010', he said.

'It is clear that neither farmers nor consumers are receiving fair treatment in the food supply chain, with power resting in the hands of a small number of retail multiples', he added.