In its report released today, the ACCC also found there is no evidence to prove retail prices are going up at a higher rate than farm-gate prices.

"Large price increases in many fresh items over recent years cannot simply be attributed to the retailers," the report states.

The report accepted many farmers were struggling but continued on to say the power exerted by retailers was "limited".

However, the ACCC did recommend that unit pricing be enforced at all supermarkets to help consumers choose between products.

According to the report the biggest impediments to improved competition include:

* the high barriers to entry for large supermarkets;

* a lack of incentives for the major supermarkets to compete strongly on price; and

* the limited price competition from independent retailers.

The Federal Government this afternoon announced a preliminary action plan in response to the ACCC's recommendations covers four specific areas: zoning and planning laws; unit pricing; the Horticulture Code of Conduct and creeping acquisitions.

The Government intends to move in the following areas as a matter of urgency:

* refer the anti-competitive impacts of state and local zoning and planning laws to the Council of Australian Governments (COAG);

* the Government will consider the best way to introduce a mandatory nationally-consistent unit pricing regime. Issues such as the product range that's captured and store size will need to be worked through in consultation with industry to ensure compliance costs are kept to a minimum;

* Minister for Agriculture Tony Burke will work together with the horticultural industry through the Horticulture Code Committee to carefully consider the ACCC's 13 recommendations to enhance the operation of the Horticulture Code of Conduct; and

* the Government will implement a creeping acquisition law, releasing a discussion paper by the end of August to gauge the best way forward.

"I believe that our action plan, combined with the broader reforms that are already in train to further strengthen competition policy, such as the amendments to the misuse of market power provision and the criminalisation of serious cartel conduct, will ensure that the grocery market remains competitive," Assistant Treasurer Chris Bowen said.