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Australians to have their say on supermarket prices

Angry shoppers will have a chance to have their say on supermarket prices and the impact it has on their household budgets as part of a new inquiry.

Consultations for an independent review of the food and grocery conduct code begin on Monday.

The grocery sector is more concentrated in Australia than in other countries, Assistant Minister for Competition Andrew Leigh says.

Woolworths and Coles signage
Coles and Woolworths dominate Australia's supermarket sector. (Luis Ascui, Joel Carrett/AAP PHOTOS)

"This review ... will look at whether the code is ensuring that both suppliers and consumers are getting a fair deal," Mr Leigh said.

"A competitive sector benefits the suppliers who get a fair price for their work and ultimately consumers who see the effects through lower prices."

It was vital everyone in the sector was treated fairly and that Australian families pay a fair price at the checkout, Agriculture Minister Murray Watt said.

Putting the code under the spotlight would help balance the power between supermarkets and suppliers, including farms, he said.

"Many farmers have talked to me about how hard they find it to deal with the supermarket chains and the lack of transparency that exists in those negotiations," he said.

Fruit picker Wayne Smith harvests oranges on a farm near Leeton
Farmers say the gap between wholesale prices and what consumers pay at the checkout is increasing. (Lukas Coch/AAP PHOTOS)

The voluntary code of conduct has four signatories - Woolworths, Coles, Aldi and Metcash - and their suppliers are automatically covered.

Repealing the code would not be considered, the man in charge of the review Craig Emerson said, as he mulls whether or not to make it mandatory.

Critics of the voluntary code say it's too weak while proponents argue mandating it could open up long legal proceedings that result in suppliers going broke before they conclude, Dr Emerson said.

But enforcement through lengthy legal proceedings is not the only option under a mandatory code.

"A mandatory code with penalty provisions would likely incentivise greater compliance by supermarkets," he said.

"Enforcement options could include infringement notices and court proceedings to impose financial penalties for non-compliance."

Greater competition between supermarkets would lead to higher prices for suppliers and lower prices for consumers, Dr Emerson said.

Submissions close on February 29.