Former Victorian Liberal premier Jeff Kennett says the Coalition’s plan to break up Coles and Woolworths was “madness” that demonised employers and would not bring down prices at the checkout.

Opposition Leader Peter Dutton said on Tuesday that a Coalition government would introduce sector-specific divestiture powers for companies including Coles, Woolworths, Metcash and Bunnings, framed as a “last resort” to stop price-gouging, land banking and mistreatment of farmers.