Small Business Minister Bruce Billson says not only has there been a change in the economy's composition, there's also been a transformation in modes of business andareas of dominance and market strength.
Intense competition between the two major supermarket chains - Coles and Woolworths- has led to lower retail grocery prices, but there are concerns this has happenedat the expense of suppliers.
"Some of the alleged behaviour of supermarkets may not necessarily breach thecompetition laws as they are today," Mr Billson told a food industry conference inCanberra on Wednesday.
"But at the the same time, it doesn't mean that the status quo is necessarilydelivering the most efficient or optimal outcomes for the market, our economy andfor our consumers."
For example, unduly harsh bargaining practices can reduce incentives for suppliers to invest and innovate, the Australian Food and Grocery Council (AFGC) gathering heard.
The government plans to release the review's terms of reference before the end of the year.
It will comprise a panel led by eminent businesspeople, competition law experts and consumer group representatives, and take about a year.
"We are very keen to get the final report from that committee before the end of 2014, but it will depend very much on the progress the independent committee makes in examining these important issues," Mr Billson later told reporters.
AFGC chief executive Gary Dawson is tipping strong growth for the food industry, despite difficulties afflicting some sectors.
AFGC's fifth annual State of the Industry update showed there was remarkable resilience in the food industry, despite rising costs, increased regulation and pressure on margins due to retail price deflation.
It points to a likely 26 per cent increase in capital investment in food manufacturing, as suppliers address productivity initiatives such as automation and other cost-reduction programs.
Solid export growth is also expected in processed food and drink to meet demand in emerging markets, especially in Asia.
"This has significantly contributed to three consecutive years of improving trade surplus in processed food and beverage products," Mr Dawson said.
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