The Australian Food and Grocery Council (AFGC) says a new code of conduct for supermarkets is nearing completion after months of negotiations with Coles and Woolworths.

Supermarkets and the AFGC have been working on a dispute resolution mechanism at the core of the code.

The next step in the process is a roundtable which is likely to include a range of key suppliers and stakeholders, including the National Farmers Federation (NFF).

The NFF pulled out of negotiations earlier this year because it wanted a mandatory code rather than a voluntary one.

The AFGC hopes the first roundtable will be convened in the next few weeks.

Competition watchdog the ACCC is currently conducting an inquiry into the misuse of market power after the major supermarkets were accused of bullying suppliers to drive down prices.

Supermarkets and the AFGC began working on the code in light of allegations of misconduct.

The supermarkets made it clear they preferred an industry-led arrangement rather than one imposed on them by the Federal Government.

A spokesman for the AFGC has told the ABC that under the code there would still be different options for resolving disputes.

One of those would be to resolve conflict through the internal mechanisms of the supermarket in question.

The next option was to appoint a mediator that would be set up in conjunction with the ACCC, while a third option was for any aggrieved supplier to pursue action legally.

The AFGC spokesman says the code is going to establish "rules of engagement" for the industry.

Another key plank of the code of conduct is set to address private label shelf space in supermarkets.