The competition regulator is looking into claims the supermarket giants improperly forced down the prices they pay suppliers.

The Australian Competition and Consumer Commission says it is investigating allegations Coles and Woolworths have bullied suppliers and favoured their own home brand products.

Around 50 suppliers are believed to have come forward with complaints.

The ACCC says, if proven, the more serious allegations carry multi-million dollar fines.

However, the ACCC's chairman Rod Sims told AM grocery suppliers were initially reluctant to talk to investigators about their dealings with Woolworths and Coles.

"I then promised confidentiality to suppliers and said we'd do all we can to keep what they say confidential," he explained.

"We eventually had around 50 come forward, and I suppose it's fair to say we've got some fairly credible and consistent issues that we now believe we need to investigate in some detail."

Coles says it will cooperate fully with any ACCC investigation into the supermarket giants.

Wesfarmers, which owns Coles, says its launched its own investigation.

The company's CEO Richard Goyder says Wesfarmers wants to do the right thing.

"We'll cooperate fully with the ACCC on any investigation they may undertake," he said.

"In the meantime we're doubly insuring that we've got the right processes in place to deal with our suppliers - our suppliers have been significant winners from the turnaround in Coles over the last five years."

Between them Coles and Woolworths control about 70 per cent of the nation's grocery market.

You can listen to ABC business editor Peter Ryan's interview with ACCC chairman Rod Sims .


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