Divestiture powers would be introduced as a method of last resort to address anti-competitive behaviour in the sector, according to plans laid out by the opposition should they win the next election.
It comes after growing calls to break up the supermarket duopoly of Coles and Woolworths after price rises.
Woolworths and Coles have come under intense pressure over pricing policies. (Joel Carrett/AAP PHOTOS)
Opposition Leader Peter Dutton said the divestiture powers addressed concerns from consumers and farmers about rising costs at the checkout.
"The situation in Australia at the moment is that there's a massive concentration of market share within the two major companies, within Coles and Woolies," he told reporters in Canberra on Tuesday.
"There are many complaints, and validly made by consumers as well, who are worried about what it means when they go to the checkout with ever-increasing prices."
The federal government has ruled out divestiture powers as a way to rein in the supermarket duopoly, with Prime Minister Anthony Albanese previously warning against unintended consequences of such a move, particularly in regional areas.
Mr Dutton said safeguards would be in place to ensure jobs would not be lost if the divestiture moves went ahead.
Under the proposal, a supermarket commissioner would also be established to handle complaints within the sector, which would then be passed on to the consumer watchdog.
It comes as the government confirmed it would impose a mandatory code of conduct for how supermarkets treat suppliers.
Under the code, fines of up to $10 million would apply for breaches.
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