Prime Minister Anthony Albanese has previously rubbished divestiture laws, and told ABC radio in February that there is a “private sector economy in Australia, and not a command and control economy. We’re not the old Soviet Union.”

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The inquiry report also recommended that price-gouging be banned by amending section 46 of the Competition and Consumer Act, to make it an offence to charge excessive prices.

“The question of whether price-gouging exists in the supermarket sector was at the heart of this inquiry,” the report said.

“The answer seems to be resounding yes, with it occurring in many and varied ways. While many of those ways appear minor on the surface – a dollar here, a fraction of a percentage there – they add up incrementally. Taken as a whole, those individual activities create a picture of an industry driven by profits at the expense of consumers, who have a right to affordable and nutritious food.

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“The evidence brought forward by people willing to speak out about the business practices of Coles and Woolworths suggests that maintaining margins and increasing margin growth is occurring at the expense of suppliers, consumers, and best business practices, and without proper justification.”

The report also called for the grocery code of conduct be made mandatory – a recommendation also made by Dr Craig Emerson, who is reviewing the code. However, the Senate committee went a step further by calling for the plant and seedling industry to be included in the code, along with retailers selling groceries such as Amazon, Costco and Chemist Warehouse. Bunnings has already rejected calls for it to be included in the code.

In a statement, Coles said it was committed to providing values to customers but indicated it did not support the recommendations.

“To the extent that the recommendations are likely to adversely impact the operation of open and free competitive markets in the provision of food and grocery in Australia, we would not support the recommendations,” the supermarket said.

Woolworths said it was taking the time to review the report. Both supermarkets have previously expressed support for a mandatory food and grocery code of conduct.

The Senate committee has also recommended a raft of new powers for the ACCC, including stronger merger law reforms that would see the regulator notified if deals of a certain size were to take place, powers to investigate land banking. The supermarkets should also be forced to adopt a standard form of practice when it comes to unit pricing that would show changes in price and size, introduce standards around discounts and promotional words.

The 2017 National Food Waste Strategy, which sits under the Department of Climate Change, Energy, Environment and Water, should also be updated to include a national approach to food waste that considers reforms on use-by and best-before dates, examines whether “unrealistic cosmetic standards” are contributing to food waste, and requires supermarkets publish data on food waste volumes.

The role of multinationals and ‘big box’ retailers should also be referred to the Senate Economics References Committee for further inquiry, according to the committee.

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