By Aaron Bunch

With Coles, Woolworths and Aldi controlling the supermarket sector, regional shoppers will continue to pay more for food and groceries than city folk without increased competition, a business council says.

Major chains have little incentive to be competitive on pricing due to their large market share, the Australian Competition and Consumer Commission found in its final report on supermarkets released on Friday.

The 441-page report said there was no “silver bullet”, delivering a suite of recommendations to address issues including barriers for new entrants, supermarkets’ power imbalance over suppliers and lack of choice in remote locations.

Shoppers pay the price for major supermarket dominance in regional and remote areas, Business Council of Co-operatives and Mutuals chief executive Melina Morrison says.

“Consumers outside the big cities will continue to suffer when it comes to their shopping bill on food and groceries because of the clear oligopoly in the supermarket sector,” Ms Morrison said.

“The slow attrition of mum and dad stores, smaller supermarkets, independent stores and co-operative shops is also the result of policies failing to support different corporate structures like co-ops and mutuals.”

The council welcomed the consumer watchdog’s call for increased competition and choice in regional and remote areas, and government support to encourage more community-owned and co-operative stores supplying groceries for members.

Ms Morrison said co-operatives were motivated to keep prices lower, increase choice on the shelf and treat suppliers ethically.

“In regional areas, where co-ops play a vital role in thinner, or less profitable markets, co-operatives are an excellent choice for retail, holding investment in the community, employing locally and facilitating shorter and more localised supply chains,” she said.

The council is the national peak body for the nation’s $43 billion co-ops and mutuals sector, representing businesses in retail, agriculture, banking, financial services and health care.

At least 72 co-operatives are currently active in grocery retailing with 75,000 members and an estimated combined turnover of $500 million.