People living in remote Indigenous communities are paying more than double the capital city prices for everyday groceries including flour, tasty cheese, apples and milk, new research has found.
A basket of nine items, which also included penne pasta, beef mince, teabags, carrots and Weet-Bix cost $99.38 on average at four remote community stores in Western Australia and the Northern Territory, the research by Choice found.
The same items cost $44.70 when averaged out across Woolworths, Coles, Aldi and IGA stores in all of Australia’s capital cities, according to the consumer advocacy group.
Choice has called on the National Indigenous Australians Agency (NIAA) and the Australian Competition and Consumer Commission to explore capping the prices of essential supermarket items in remote communities.
While the competition watchdog does not set supermarket prices, Choice wants the ACCC to recommend that the federal government develop an affordable pricing policy which could include price caps.
Choice made the recommendation in its submission to the ACCC’s ongoing inquiry into Australia’s supermarket sector.
To gather samples for its price comparison, Choice bought nine items from stores in the Great Sandy Desert and Pilbara regions in WA and in the West Daly region and on the Tiwi Islands in the NT in August.
Their prices were then compared with those of identical groceries in capital centres around the country.
The highest price was in the West Daly area, west of Darwin, where the items cost $110.82.
Choice’s Jarni Blakkarly said the price differences were “pretty astounding”. In capital cities, people paid $4.87 for a kilogram of apples on average, whereas the cost was $7.50 a kilo at the store Choice visited on the Tiwi Islands, he said.
“Availability of food in the first place is also a big issue faced by people living in remote communities,” he said. “At one store visited by our mystery shopper there was no bread to be found, and our shopper had to make do with frozen hotdog buns.”
Four years ago, a federal inquiry found there was a “tenuous” supply of affordable, nutritious food in many remote communities that had persisted despite multiple previous inquiries.
Among the 2020 inquiry’s recommendations was that the government establish real-time price monitoring across all remote community stores, to be reported publicly.
Financial counsellor and Boandik woman Bettina Cooper said live price monitoring was a good idea but the government needed to cap the prices of essential items if it was “serious about closing the gap”.
“We need to be closing the gap, not supporting profit-making, while our First Nations brothers and sisters in remote communities are struggling to feed their family,” she said.
Cooper, who works at Mob Strong Debt Help, disagreed with economists who said price caps would do little except reduce the supply of groceries.
“I’d like to see them go and sit in a remote community and try and feed their family on a Centrelink payment and then have that conversation with them,” she said.
Prof Nitika Garg, a consumer behaviour researcher at the University of New South Wales, said higher prices in remote areas meant people were more likely to buy cheaper food that was less healthy but she was dubious about price caps.
Before the Queensland election earlier this month, the Greens proposed capping prices on 30 essential groceries such as bread, milk and nappies across the state at January 2024 levels, with any price increases tied to wage increases.
Prof Phil Lewis, who leads the University of Canberra’s Centre for Labour Market Research, said capping prices did nothing but reduce supply.
“If you actually try and reduce the price below what suppliers are willing to supply at, they’ll stop so much,” he said. “And there’ll be scarcities arising in the shop.”
The University of Queensland’s Prof John Quiggin said government subsidies such as his state’s remote communities freight assistance scheme were a better way to bring down prices.
“We need programs that reduce the cost of healthy food [in remote areas] and encourage people to have healthy diets,” he said. “This is quite a separate problem from the problem we face in general, which is that prices have gone up and wages haven’t.”
