Labor, Green and independent MPs have ridiculed Opposition Leader Peter Dutton for telling consumers to boycott Woolworths after the supermarket chain pulled its Australia Day merchandise, but Liberal insiders say he is playing smart politics.

Tony Barry, a former deputy state director of the Victorian Liberal Party turned pollster, said Mr Dutton was looking to snap the public’s “toxic” association between the Coalition and big business at a time when voters were battling cost-of-living pressures.