Dutton accused of stoking 'culture war' with boycott call as second supermarket ditches Australia Day merchandise

The political storm over Australia Day shows no sign of easing as a second supermarket joined Woolworths in declining to sell merchandise in its stores.

Aldi confirmed it will cease selling merchandise, such as T-shirts and thongs in the lead-up to the Australia Day public holiday on January 26.

Opposition Leader Peter Dutton yesterday suggested shoppers should "boycott Woolworths" after the retailer announced it will no longer sell items to help mark he national day.

READ MORE: Peter Dutton calls for Woolworths boycott after Australia Day merchandise dropped

But federal front bencher Murray Watt speaking on Today this morning accused him of political grandstanding and stoking a "culture war".

"I think what this week has really shown is that Peter Dutton has just got completely the wrong priorities, especially when it comes to supermarkets," Watt said.

The federal government was focused on more important matters, he says, after announcing the inquiry into supermarket prices.

"And meanwhile, Peter Dutton's just out there starting another culture war about Australia Day and about thongs and flags.

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"I just think it shows that he's got the wrong priorities when what people really care about with supermarket rates is the prices they're paying at the checkouts."

Aldi declined to make a statement but confirmed it will cease stocking its Australia Day-themed products in its Special Buys catalogue.

Woolworths said it will still sell Australian flags at Big W, which it does year-round.

Many First Nations people regard January 26 a day of mourning rather than one of celebration because it marks the day the British colonised Australia.