'Shrinkflation' targeted in supermarket crackdown

The practice of "shrinkflation" - when a product is sold for the same price though its size has been reduced - is in the government's sights as households across the country struggle with a cost-of-living crisis.

Prime Minister Anthony Albanese said Labor was also making changes to Australia's consumer watchdog to ensure it remained a "tough cop on the beat".

"We are cracking down on supermarkets to help Australians get a fair deal at the checkout," he said.

The government will consult on the code on areas including improving readability and visibility of unit pricing in stores and addressing inconsistent use of units of measure across supermarkets.

The prime minister says the crackdown on supermarkets will help people get a fairer deal. (Con Chronis/AAP PHOTOS)

A spokesman for Coles has said the company was committed to keeping prices low at its stores.

A Woolworths spokesperson has previously said pack and serving sizes were up to the individual manufacturer.

Coles and Woolworths make up almost 70 per cent of supermarket retail sales nation-wide.

On Tuesday, the government announced an extra $30 million for the Australian Competition and Consumer Commission, to help it complete more investigations and conduct enforcement.

Assistant Treasurer Stephen Jones insisted there would be no tolerance for businesses taking advantage of consumers.

"The bar needs to be raised significantly," he said.

"Australian consumers deserve fair prices, not dodgy discounts."

The ACCC announced on September 23 it was taking legal action against Coles and Woolworths for allegedly misleading customers through discount pricing claims.

A mandatory food and grocery code has been released by the government for consultation, proposing multimillion-dollar penalties for retailers over serious breaches.

The previous code, which governed the relationship between supermarkets and suppliers, was voluntary.