As a $30 million boost for the consumer watchdog to investigate unfair practices was announced, Treasurer Jim Chalmers said the federal government would work with states and territories to prevent supermarkets from hoarding land.
It follows concerns supermarkets were land banking, where a company purchases a vacant block with no intention of developing the site, in order to stop a competitor from using the location.
"This is all about ... more sites for potential competitors to the big supermarkets, we want to make sure that people are getting a fair go at the checkout," Dr Chalmers told reporters in Canberra on Tuesday.
"I'll also work closely with states and territories to progress reform of planning and zoning regulations as fast as possible so that we can boost competition in the supermarket sector by opening up more sites for new stores."
An interim report into the supermarket sector by the Australian Competition and Consumer Commission said the organisation had received concerns about alleged land banking practices, which was increasing barriers for other companies to enter the market.
The treasurer said increased competition would lead to lower prices.
Households have been struggling under the weight of cost-of-living pressures. (Con Chronis/AAP PHOTOS)
"The work that I do with the state and territory treasuries, and the work that they do with local governments, will be all about building that evidence base for action," he said.
"There are concerns around land banking, there are concerns around any competitive practices and this work that I'll do with my colleagues and counterparts is all about getting to the bottom of that and taking action."
The $30 million boost will aid the commission in monitoring behaviour and investigating concerns about falsely justifying higher prices.
The extra funding for the consumer watchdog comes a week after it said it would take Coles and Woolworths to court over alleged misleading specials.
The commission claimed the major supermarkets had briefly increased the prices of items before placing them on special as a promotion at a slightly lower price, but still higher than its original cost.
Coles and Woolworths make up two thirds of the supermarket sector in Australia. (Con Chronis/AAP PHOTOS)
Coles and Woolworths make up 67 per cent of the supermarket sector in Australia.
Prime Minister Anthony Albanese said supermarkets had been put on notice for their "dodgy practices".
"We don't want to see ordinary Australians, families and pensioners being taken for a ride by the supermarkets, and we're taking steps to make sure they get a fair go at the checkout," he said.
The government also released for consultation last week a new mandatory Food and Grocery Code, which would impose multi-million dollar penalties on companies for serious breaches.
The code, which was previously voluntary, had governed the relationship between supermarkets and suppliers.
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