Supermarket giant Coles has appointed former Victorian Premier Jeff Kennett to resolve disputes with suppliers.

The move comes as Coles faces a lawsuit from Australia’s competition watchdog for allegedly using its size and power to extract payments from 200 small suppliers as part of an orchestrated effort to improve it’s bottom line.

Coles has appointed Mr Kennett as an independent arbiter, to oversee a new supplier charter and help resolve commercial disputes.

Chief executive John Durkan said Mr Kennett’s decision on disputes would be binding on the supermarket chain and the former premier was free to make his decisions public if he wished.

“Mr Kennett will make recommendations directly to me on proposals to resolve disputes. Should there continue to be disagreements, Mr Kennett’s final recommendations will be binding on Coles,” Mr Durkan said.

“If Mr Kennett feels the need, he is free to publish his decisions or raise any concerns externally, as he sees fit, including through the media, the Australian Consumer and Competition Commission and other relevant authorities.”

Mr Kennett said he would be “completely independent” in resolving disputes.

“I hope my services as the independent arbiter will rarely be called upon,” he said.

“But if there are disputes that require intervention, I can assure both and all parties of my complete independence in determining a common sense solution.”