By Poppy Johnston in Canberra

Every supermarket merger will be investigated by the competition regulator under new laws designed to keep market concentration in check and drive down prices.

The supermarket sector, dominated by a few giants, has been singled out by the federal treasurer as he vies to push through the biggest reforms to Australia’s merger settings in decades.

Jim Chalmers maintains the rules underpinning business marriages are falling short – neither effective at stopping anti-competitive business combinations, nor at letting unproblematic mergers glide through without delay.

Replacing voluntary notification with a mandatory regime is a key change, along with empowering the Australian Competition and Consumer Commission as the decision maker.

Not all mergers will be captured – only deals above certain financial thresholds.

Yet there would be enough flexibility to allow the treasurer to adjust those thresholds to allow the ACCC to “review all the mergers that they have been typically concerned about”.

The powers should ensure the competition watchdog is notified of every merger in the supermarket sector, Dr Chalmers will say when he introduces the legislation to parliament on Thursday.

“We want to make sure supermarket mergers don’t come at the cost of Australians, families and pensioners getting a fair price on their grocery bills,” Dr Chalmers said.

“Our merger reforms will help ensure our supermarkets are as competitive as they can be so Australians get the best prices possible.”

Supermarkets have already been in the firing line, with the ACCC accusing Coles and Woolworths of breaking consumer law by duping customers with misleading discount pricing claims on hundreds of products.

The government has launched several reviews and inquiries into the sector and a draft of a mandatory code of conduct is due later in 2024.

The federal opposition is calling for divestiture powers to retroactively break up supermarkets but the ACCC has favoured stronger merger laws to stop larger players absorbing smaller competitors in the first place.

Most Australian sectors are dominated by a few big players and Treasury research suggests a lack of competition increases the cost of doing business and can lead to higher prices and lower wage growth.