Prime Minister Anthony Albanese has announced a significant funding boost aimed at cracking down on alleged deceptive practices by major supermarkets, particularly in light of a recent scandal involving misleading discounts.

As part of this initiative, the Australian Competition and Consumer Commission (ACCC) will receive an additional $30 million to enhance its investigations into misleading supermarket practices.

This funding announcement coincides with the government's release of a draft mandatory food and grocery code, which proposes severe penalties for significant violations.

With the extra funding, the ACCC will be able to conduct more investigations into deceptive pricing, which has been a persistent issue at major grocery chains like Coles and Woolworths.

Currently, the ACCC is suing Coles and Woolworths for misleading discount promotions that involved temporarily raising prices before applying discount stickers, thereby misleading customers about their actual savings.

Albanese emphasized the government's commitment to protecting consumers, asserting that ordinary Australians should not be exploited by supermarkets.

In response to these issues, the Opposition has proposed divestiture powers to potentially break up companies that are found to be consistently price-gouging, although Albanese has expressed opposition to this approach.

Additionally, Treasurer Jim Chalmers is planning to reform local planning rules to facilitate the establishment of new supermarkets, which aims to address barriers to competition in the grocery sector.