The advocacy group says a new investigation has revealed how the two dominant supermarkets are using poorer shelf positioning and copycat packaging to give an advantage to their own brands over established ones.
The watchdog says it's received feedback from shoppers that the generic brands are replacing other brands and its investigation shows consumers are not imagining things.
Consumers may be saving some money but it's bad news for independent suppliers' brands, Choice says.
"When two brands compete for space on the shelf and when one of those brands is owned by the supermarket, it's not hard to figure out who the winner is going to be," Choice spokeswoman Ingrid Just said in a statement on Sunday.
"The generic labels are very effective, it is easy to mistakenly pick up generic brand products because they look just like established brands.
"For the consumer who is watching their budget, the rise of generic brands may be a good thing.
"For the shopper who wants an independent product however, their choices become more limited."
Choice says one in four supermarket products are currently generic and this will grow to one in three by 2016.
Ms Just said shoppers should use people power - if their favourite brands disappear, tell the store or go elsewhere.
What do you think of generic branded products? Do you purchase them to save money?