Pressure is mounting on Australia's two largest supermarket chains to "do the right thing" by customers, Anthony Albanese says.
Households are buckling under the weight of high food prices, prompting an intervention from Labor.
The government has directed the Australian Competition and Consumer Commission to review prices and competition in the sector.
It has also appointed former Labor minister Craig Emerson to review the effectiveness of the grocery code of conduct, which governs how the supermarkets treat their suppliers.
The prime minister said Coles and Woolworths knew "public opinion matters to their business".
"There'll be pressure on the supermarkets to do the right thing," he told Hit WA radio.
"The pressure has built over a period of time."
Mr Albanese said when farmers were getting less for their products, people should "quite clearly" be paying less at the check out.
"We have stood up for customers, stood up for farmers as well," he said.
Cabinet minister Bill Shorten accused the major supermarkets of using "the camouflage of inflation" to price gouge.
"The two big food companies in my opinion have been taking advantage of Australian shoppers," he told reporters in Western Australia.
"Anyone who goes shopping on a regular basis will see that."
Customers were not "goldfish" when it came to product prices being hiked and then marked down, Mr Shorten said.
"At the end of the day, companies have got a right to make a profit, but in a time of cost-of-living crisis, it’s their customers who are what keep them in business," he said.
"So perhaps they should think more about their customers."
Nationals leader David Littleproud has called for divestiture powers to help increase competition in the sector.
“Let’s bring forward all those reviews 12 months earlier and actually give the ACCC the powers they need,” he told Seven's Sunrise.
“We need to come together as legislators, put aside politics and bring in divestiture powers which would strip these big supermarkets of some of their chains and in fact, even in a geographical level, might even see that some of their stores have to be sold off to competitors to increase competition."
Agriculture Minister Murray Watt said it was "heartbreaking" farmers were being placed in a difficult position by supermarkets.
"That's why we do need stronger laws and stronger rules around supermarket behaviour than what we've ever had before," he told AAP.
"I'm hoping that that will be the outcome of these reviews."
Greens senator Nick McKim is leading a parliamentary inquiry into supermarket prices, which will soon hear from those in charge of the major chains.
