Coles' decision this week to cut the price of selected fruit and vegetables by up to 50 per cent has triggered a new price war with Woolworths, which says it will meet or beat many advertised Coles prices today.

''Claims of massive price cuts by any retailer in fresh produce over the last 12 months should be critically examined,'' Woolworths' fresh food general manager, Pat McEntee, said.

''The fact is, there have been significantly lower fresh produce prices recently due to an oversupply of stock. This has been well documented by the industry and the Australian Bureau of Statistics.''

But the opposition spokesman for small business, Bruce Billson, said assurances were needed the price cuts were not an aggressive approach by powerful interests to control the supply chain.

''The concern that the Coalition has is that there's an enormous power imbalance in the supply chain, between the big supermarkets and smaller suppliers, and where that market dominance is detrimental to suppliers in the longer-term, consumers will also be disadvantaged,'' Mr Billson said.

Outspoken Queensland Independent Bob Katter was more pessimistic and said Australian farming was on the brink.

''Clearly Coles intends that there be no fruit and vegetable growers in Australia. We are already a net importer of fruit and vegetables,'' Mr Katter said. ''Within four years the country will not be able to feed itself. Do you seriously think our farmers can work for less than they are working for now?''

But the government's competition spokesman, David Bradbury, welcomed the price reprieve for consumers.

''Producers and farmers are also entitled to get a fair price for their produce and the government has confidence that farmers and supermarkets will continue to work together to ensure the long-term viability of primary production in Australia,'' he said.