I was recently approached by a community member who complained about the price of a carton of beer at the Bamaga Tavern. He remembered when it was only $35. I remember the “good old days” as well when my first car cost me $100 and my wage was $49 a week! Alas, times have changed and the cost of living increases each year. I explained why a carton was more expensive these days but he was not interested.

However, this community member is not alone judging by the complaints on various social media platforms and comments from customers about the high cost of goods and services in the NPA (and remote communities generally). In fact, there is a Government inquiry taking place to look into this very issue.

These complaints, while being genuinely felt by our customers, arise from perhaps a lack of understanding as to the economic and commercial viability factors that have to be considered by Bamaga Enterprises Ltd (BEL) and other retailers in determining the price of alcohol or fuel, for example. I hope the following explanation throws some light on why prices of essential goods are high in remote communities.

$300,000 for electricity

We all know that everyone prefers to buy a cold carton at the drive through, and that our Tavern and Lodge patrons like to enjoy a meal or drink in air-conditioned comfort while watching the Foxtel TV channels. Customers also like to purchase cold soft drinks and hot food from the Servo. Well, BEL’s electricity bill last year to cover the cost of freezers, coolers, lights, stoves/ovens and air conditioning etc to provide these services and comforts was more than $300,000.

$120,000 for maintaining buildings and repairs

Then there are the lease fees and statutory charges of over $120,000 annually that BEL has to pay to Council for sewerage and water; the various premises, grounds and plants and equipment that have to be maintained, upgraded and renovated. Repairs and maintenance costs last year were $400,000 to ensure that patrons could enjoy better facilities. This doesn’t include the actual cost of new additions and plant and equipment.

$800,000 for freight

Let us not forget that Bamaga is at the end of the supply chain and that the goods have to be shipped up from Cairns or places further south. BEL’s freight bill is over $800,000 p.a. Do you know, for example, that in addition to the freight costs, a 25% dangerous goods levy on the shipment of ULP and a variable fuel levy on all freight applies? This significantly adds to the fuel pump prices which is not the fault of the shipping company.

$2.8 million in employee costs

Finally, BEL’s biggest expense is $2.8 million a year in employee costs that keeps the whole operation going and allows the community to access the goods and services offered by BEL. This obviously creates significant employment with more than 50 people working across BEL operations.

Of course, many other costs are incurred by BEL in running the various businesses such as significant accounting fees and insurance to name but two.

All these costs have to be taken into account when calculating the retail price of fuel, alcohol and food so as to ensure that BEL remains a commercially viable operation and makes a profit. This is especially important because BEL is community owned and, under its Social Support Policy, reinvests its profits back into the community by way of donations, sponsorships and community infrastructure. So whatever you spend on food and beverages, for example, goes back to help a community member.

BEL exists to support the community and provide essential goods and services – not to maximise its profits at the expense of the community. However, there is a cost in doing this which is reflected in the retail prices that have to be charged to ensure the company remains commercially viable.

Please appreciate all the hard work and effort that goes into providing these goods and services and understand why local prices are what they are.

Chris Foord, General Manager