The country's grocery giants could be forced to comply with a mandatory code of conduct amid surging shelf prices and skyrocketing supermarket profits.
The government announced on Wednesday that former Labor minister Craig Emerson would head its review of the Food and Grocery Code of conduct, aimed at improving business standards in the sector.
Prime Minister Anthony Albanese has held talks with Dr Emerson and Treasurer Jim Chalmers to discuss the review's direction.
"People look at the profits that supermarkets are making and know that there is effectively a big duopoly who have considerable market power," Mr Albanese told ABC radio on Monday.
"And the problem for farmers for example, is if they're wanting to sell their goods, and particularly if their goods in in food, which has time limits in terms of shelf life, then they have a restricted capacity.
"So we need to look at the full range of measures that are available at the moment."
The review could recommend the code, which is currently voluntary, become a mandatory agreement.
But Woolworths, Coles, Metcash - the owners of IGA and Mitre 10 - and Aldi are already signatories.
Dr Chalmers is also holding discussions with the Australian consumer watchdog about other measures that could improve transparency - a measure which NSW Farmers prefers.
According to the farming group, a review of the code would rely on testimony from the stakeholders whereas an investigation by the Australian Competition and Consumer Commission would be able to analyse a greater portion of the supply chain.
"The problem for the big supermarket chains is that when people look at the prices they're paying farmers, and then look at what the prices they're charging - people can see there's a discrepancy there," Mr Albanese said.
"We want to make sure that consumers are looked after and I think that's what people expect."
