Retailers are denying accusations from a major consumer group that they sabotaged the GroceryChoice project.

Consumer group Choice lashed out at the Australian National Retailers Association this morning for undermining the GroceryChoice website.

Choice's chief executive, Nick Stace, told a Senate hearing into the scrapping of the website that the association which represents the major supermarkets sabotaged the project.

Choice had taken over running the website when the Federal Government dumped the project in June, but Mr Stace says the Australian National Retailers Association stopped individual supermarkets from co-operating, and that stymied the project.

"They sabotaged, and you know I think there's an anti-democratic kind of strain that's running through that, because it was an election commitment on a popularly elected government and I think its pretty anti-democratic for a body like ANRA and the supermarkets to block progress in that way," he told the hearing.

"It's certainly anti-competitive bearing in mind that this would have added an important tool for consumers to compare prices."

Competition law expert, Associate Professor Frank Zumbo from the University of NSW, agrees that the project was undermined by the major retailers, and says it would be easy for them to provide consumers with pricing information.

"Coles and Woolworths have sophisticated information systems to keep track of every product they sell. They have the technology to provide customers with timely and up to date pricing information on all their products," he wrote in a statement on the issue.

"So, if Coles and Woolworths were serious about customer service they would launch their own websites giving consumers 'real time' pricing information for every product in every store. Customers could then go online to check prices for themselves at any time."

Allegations denied

However, the Australian National Retailers Association denies scuttling the GroceryChoice project, and its chief executive Margy Osmond says there were many hurdles to implementing the scheme.

"Much of the information that was being requested was simply not possible to be supplied," she told ABC News Online.

"The large retailers don't actually have standardised prices across the country, they have an extremely flexible approach which allows consumers to get the best deals in many parts of Australia."

Margy Osmond says ANRA is only a representative body and could not have instructed its members to hinder the project.

Instead she lays much of the blame for website's failure with Choice.

"We were very happy to be in discussions with Choice, and we were very keen to see the exercise progress, but we simply couldn't get the information and the assurances from Choice that would make that possible," she said.

"Our members are interested in anything that's good for consumers and good for transparency in the marketplace. We have been in discussions with the Minister, and we'll continue to be in discussions with the Government about what we can do in that space."

Professor Zumbo says the Government should not abandon the idea of grocery prices being available on the internet.

"If Coles and Woolworths fail to provide customers with real time pricing information, then the Federal Government should move to require Coles and Woolworths to do so," Professor Zumbo concluded.

Additional $4 million

Treasury officials say the Government might have to pay consumer organisation Choice an additional $4 million for axing the GroceryChoice website.

The Government announced in June that it was scrapping the website after it had already spent $8 million on it.

Treasury officials have told today's committee hearing they expect the Government's remaining liability to be less than $4 million.

Coalition Senator Guy Barnett has expressed concerns that the Government's tight deadline for setting up GroceryChoice meant the cheapest tender was not accepted.

The Australian Competition and Consumer Commission has told a Senate inquiry that the Informed Sources group offered to collect grocery information for $2.7 million less than the offer that the ACCC accepted.

They told the inquiry they had concerns about whether Informed Sources could collect the data and did not have enough time to check, because the Government wanted the website set up in six weeks.

Liberal Senator Guy Barnett says pressure from the Government led them to take a more expensive option.