Two people were arrested as part of the investigation into fugitive police killer Dezi Freeman.

A man and a woman were arrested about 7am today at two properties in north-east Victoria, police said.

Police confirmed the arrests were part of the probe into the movements of Freeman following the shootings in Porepunkah last August.

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Police said the pair were associates of Freeman but not family. They've since been released from custody pending further inquiries.

Authorities are investigating if the pair helped the cop killer get to the remote property where he was killed by police on Monday, after several months on the run.

Police said anyone found to have been harbouring Freeman could face up to 20 years behind bars.

Freeman was hiding out in something that resembled a shipping container and a caravan in Thologolong north-east of Porepunkah and on the border with NSW.

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The seven-month manhunt ended in a hail of bullets outside his hiding place, with the fugitive understood to have fired two shots before police returned fire up to 20 times.

Special Operations Group members had spent three hours at the property attempting to negotiate a peaceful surrender with Freeman before multiple shots were fired.

"He fired two shots and eight police responded. He was shot at least 20 times," The Age crime writer John Silvester told 3AW.

"In all probability, the gun was shot out of his hand because it was some distance away."

Investigators had been tracking a car coming and going from 56-year-old Freeman's hideout before he was killed in a shootout about 8.30am on Monday, 9News understands.

9News has been told officers had been surveilling Freeman for several days after watching the car, which repeatedly made the almost 200-kilometre trip between Porepunkah and Thologolong, located on the Victoria-NSW border.

Police have asserted it would have been very difficult for the fugitive to remain hidden for so long without help.

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A grand prize of $8m was up for grabs this evening.

A fresh and devastating blow is heading for struggling households with the price of food expected to spike even further in coming weeks.

Retailers are now having to pass on the massive costs they've been absorbing, in the weeks since the Middle East war began. 

Fresh everyday food staples are about to cost more as a result of the fuel crisis.

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Independent supermarket Ritchies is among those sounding the alarm.

Meat, fruit and vegetables are all expected to cost 20 per cent more and in as little as three weeks.

NSW Farmers bosses say members are being hit.

"Particularly the ones that have further to travel like onions and lemons which are already incurring a $1 per kilometre additional transport levy for those trucks bringing that produce to the distribution centres to get to consumers at the supermarkets," Xavier Martin, NSW farmers president said.

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The price of home brand milk is also expected to climb, with dairy farmers asking supermarkets to increase prices by 30 cents per litre as processors pay through the nose to combat high diesel and fertiliser shortages.

As for everything else, retailers have been absorbing exploding transport costs but now need to pass that onto shoppers.

Some economists say a 20 per cent price hike for fresh food is just the beginning with even further increases anticipated unless the war in the Middle East ends.

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"Even if it ended today where has been impacts on supply chains that will be with us for weeks and months ahead," Energy Minster Chris Bowen said.

New data from the UN says global wheat prices have already risen by 4.3 per cent last month, with farmers planting less because of the challenges they are facing.

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Two members of a prominent horse racing family and a former jockey are among nine people arrested over a plot to smuggle cocaine worth a billion dollars into Victoria.

Federal Police swooped after a boat believed to be involved in the importation scheme sank in Bass Strait.

Shots show a man from Glenroy in Melbourne man handcuffed and walked to an unmarked police car.

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Another from Morwell in regional Victoria was marched through the AFP loading bay.

They're two of nine men charged over plots to allegedly smuggle more than a billion dollars worth of cocaine into Victoria using fishing boats.

Among those arrested are prominent horse racing figures: trainer Grant Dalziel, his son Peter and former jockey Brian Park.

Former AFP Detective Supt David Craig claimed it was a "very sophisticated organisation".

"What I think makes it striking about this is, that the alleged use of trusted high profile figures from the racing industry, allegedly, and it shows that organised crime can embed itself, behind any respectable entities or industry."

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A 10 month probe began in May last year after four people were rescued from a boat off the South Gippsland Coast in treacherous conditions.

Their movements after were monitored.

Police say the drug importation syndicate involved sending out 'daughter vessels' into the Bass Straight to receive drugs from a 'mother ship', travelling through Australian waters.

They allegedly tried to smuggle quantities of up to 3.5 tonnes of cocaine into the country but their attempts failed.

"It's almost cinematic isn't it. It starts with a sunken vessel, and then the persistence of the people trying to retrieve that is a thread that leads to a billion dollar national drug distribution network," Craig said.

Over the past month raids have been carried out at properties across the state with a boat police believe was used by the accused conspirators seized.

Eight men were arrested in Victoria and one in Sydney.

The alleged offenders aged between 31 and 72 are now facing a combined 38 charges.

The accused men from Victoria will appear at the Melbourne Magistrates court again in July. 

Five of them are in custody, while the others were released on bail.

If convicted, seven of those arrested face the possibility of life behind bars.

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