The Greens will introduce a bill to parliament that would grant powers to break up Coles and Woolworths if they were found to be misusing their market dominance. 

The supermarket giants have faced accusations of gouging Australians to improve their profits, using their market power to squeeze out competitors and set the terms of trade.

While Coles and Woolworths have denied price gouging consumers, several inquiries are scrutinising their behaviour, and the government has already promised it will seek to act to lower the price of groceries.

But the prime minister has ruled out one of those responses being "divestiture" powers like those that exist in the United States and United Kingdom, which could force Coles and Woolworths to sell off parts of their business if they were found to be behaving anti-competitively.

Mr Albanese said last month Australia was "not the old Soviet Union", instead suggesting he would prefer to improve competition by encouraging more foreign chains to set up shop in Australia.

On Tuesday, the Greens will force the issue in the Senate, where they are set to introduce a bill that would grant the Australian Competition and Consumer Commission the power to apply to the courts for a break up order.

The bill would give the courts the option to order a divestment where a company is found to be misusing their market power to inflate prices, exploit their supply chains or keep out competition.

Greens senator Nick McKim said that was a threshold already defined in competition law, and this bill would provide courts with another remedy where a breach was determined.

"These are pretty commonplace powers in a lot of other so called free market economies in other parts of the world ... these are not radical proposals," Senator McKim said.

"This is actually about making sure we have enough competition in various sectors of our economy so the corporates can't just price gouge.

"The giant supermarket corporations have clearly had their way for far too long and it is time to put the interests of people above corporate profits."

Senator McKim said even if the powers weren't used, having that punishment on the table would "no doubt focus the minds of the CEOs of big corporations in Australia".

The idea already has the vocal support of Nationals leader David Littleproud, who has encouraged the government to take a "big stick" to Coles and Woolworths.

Mr Littleproud said the Nationals had urged the government to introduce divestiture powers since the end of 2022, and would continue to push for the powers to be created.

"[This is about] transparency and fairness and that's all farmers want and I think that's all consumers want," he said.

And in an unlikely alliance, Mr Littleproud said the Greens legislation had merit.

"We are going to work with them," he said.

"We think, particularly around supermarkets, there are some technical aspects that need to be honed in on.

"Particularly around the grocery code of conduct and existing horticultural code of conducts and dairy codes of conduct."

The competition watchdog's former chair Allan Fels recently concluded an investigation into price gouging practices by big businesses, finding supermarkets were one of several sectors exploiting their market power in a way that drove up inflation.

He told the ABC if a company breaches competition law there should be provisions to break them up, if deemed appropriate.

"Those laws have worked extremely well in the US; for example, the break up of the AT&T telephone monopoly in the '80s has led to all those huge changes and improvements in the telephone [market] over many years," Mr Fels said.

"In other countries it's a basic element of serious competition law."

The ACCC's current chair, Gina Cass-Gottlieb, told a Senate committee last year that she believed the concentration of power in the supermarket sector made it easier for there to be higher mark-ups in prices.

Ms Cass-Gottlieb said it would be expected if competition was improved that food prices would also be cheaper.