Five major grocery retailers including Woolworths have launched a joint $125 million venture capital fund, W23 Global.

The fund aims to invest in startups and scale-ups that can innovate in the grocery industry, focusing on improving customer experiences, transforming the value chain, and enhancing sustainability.

Each participating retailer contributes equally to the fund and has direct involvement through their CEOs on the investment committee.

W23 Global is proactively seeking entrepreneurs with solutions to current problems in the grocery sector.

Simultaneously, Australian supermarkets are under scrutiny from the government for potential profiteering and price gouging.

The government is contemplating tougher regulations, with the possibility of making industry codes of conduct compulsory and introducing penalties for breaches.