The Greens' proposed legislation would empower the consumer watchdog to force companies breaching competition laws to sell assets, cutting their market share and influence.
While the Federal Government has baulked at the idea, the push for so-called ‘big stick’ laws to help with the cost of living crisis has left the Nationals backing their political foes.
However, that support comes with a caveat that dairy and horticulture codes be created to ensure farmers are adequately protected.
And the Liberals have yet to be convinced that reducing the cost of food involves loving your Greens.
Federal Nationals Leader David Littleproud called on the big supermarket chains to back the laws, saying they had nothing to be scared of if they followed the rules.
"If you are as pure as the driven snow as you claim to be, then why wouldn't you help us draw up this architecture?," he said in Canberra on March 19.
"Because if you're doing the right thing, they'll never be used."
The Greens were expected introduce their private bill in the Senate by March 22.
Additional amendments to the Greens bill would tackle ‘land banking’, where supermarkets buy up land to force smaller competitors out of the market, Mr Littleproud said.
Some independents have also backed the ‘big stick’ laws, but Prime Minister Anthony Albanese has ruled it out, likening divestiture powers to the former Soviet Union.
The Nationals also need to convince their Liberal colleagues to get on board, with the coalition partner calling for more detail.
"Conceptually, I'm not against divestiture powers. They play a role in major economies around the world," Liberal frontbencher Simon Birmingham said.
"The detail of it is something that I would want to have a close look at."
The United Kingdom, United States, Ireland, Italy and the Netherlands have similar laws.
The laws would stop supermarkets price gouging, Greens senator Nick McKim said.
“The market domination of Coles and Woolworths gives them the power to crush farmers, squeeze out competition and shaft their customers," he said.
The powers would also cover big banks and energy giants to ensure competition across different sectors, Senator McKim said.
Coles and Woolworths have been accused of strong-arming suppliers, stitching up farmers and shafting customers.
The retailers have defended their prices and relationships, saying they were trying to balance fair prices for producers against low prices for customers.
Woolworths pointed to the increase in competition from chains like ALDI and Amazon on top of giants like Bunnings, Chemist Warehouse and the Reject Shop.
It also highlighted comments from the chair of AUSVEG, who warned forced divestiture may result in regional areas not being serviced.
The supermarkets are under pressure on several fronts, with a parliamentary inquiry and at least two external investigations underway.
One of those is into the Food and Grocery Code of Conduct, which governs the relationship between supermarkets and producers.
Farmers had raised how hard it was to deal with the major grocery chains given a lack of transparency in negotiations, Federal Agriculture Minister Murray Watt said.
The Business Council of Australia has come out against the Green’s proposal, saying the changes could result in the unintended consequence of consumers paying more at the check out.
“Given this bill's economy-wide reach, it could have a chilling effect on business investment and jobs across Australia at a time when we need to focus on growth and productivity," chief executive Bran Black said.
“Policies should not be rushed, particularly if they could negatively impact consumers and the unintended consequences risk business investment and growth."
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