Australia’s independent grocers have called on the country’s government to improve competition in the local retail sector.

The National Association of Retail Grocers of Australia (NARGA) today (2 July) published a report on the country’s retail grocery business and warned that the relative lack of competition could inflate prices.

NARGA said Australia has the “dubious honour of being one of the most concentrated grocery markets in the Western world” with retailers Woolworths and Coles holding almost 80% of the market between them.

The report, carried out by consultants PricewaterhouseCoopers (Pwc), found suggestions that food prices are higher in Australia in cities with less independent retailers.

Food price inflation in Sydney, for instance, is higher than it is in Perth. NARGA said. Independent retailers account for 32% of the local market in Perth, compared with under 20% in Sydney, the association found.

“The PwC survey confirms NARGA’s view that action is needed to enhance competition in the retail grocery market,” NARGA chairman John Cummings said. “That can best be achieved by ensuring that the independent grocery retailers remain as vigorous competitors for the chains.”

Earlier today, Coles accepted a A$22bn (US$18.9bn) takeover bid from Australian conglomerate Wesfarmers.