Poor to pay more for Big Macs?

McDonalds in Australia is changing the way it charges for its burgers, moving towards raising prices in areas with the greatest demand.

The effect of this would be that people pay more at busier McDonalds outlets, which are often the ones located in areas with low average earnings.

McDonalds New Zealand has released a statement on its website which says the company has a different pricing system to Australia's and that the company sets "recommended retail prices" at company owned outlets.

But 80 per cent of McDonalds outlets are franchises and these "can set their own pricing, which is dependent on their own cost structure but is set to ensure value for customers," the statement said.

It said the company does not "recommend" outlet specific prices but that could change where the costs of running an outlet is higher, for example, in the CBD where there are higher rents.

McDonalds spokeswoman Kate Porter said McDonalds New Zealand would not be commenting on the price increase "because it is an Australian issue".

Christopher Zinn from the Australian consumer advocacy group, Choice, said the news that McDonalds is increasing its pricing unwelcome, but not entirely unexpected.

"Well, the initial response was this must have been an April Fool's joke that came out of the traps too early," he told News Limited newspapers.

"But on reflection it makes sense because McDonald's, like many other businesses, are all about maximising revenue and there's no doubt that the best way to do that is perhaps to increase the prices for those who are less able or less aware of those increases."

Mr Zinn said McDonald's is singling out particular sections of the community.

"That can be with a number of different suburbs, that there's no doubt that a lot of the fuss has been about the lower income suburbs," he said.

"This might be teenagers who perhaps spend without realising exactly how much it's going to cost, perhaps don't have access to transport to take them to competitors and perhaps less responsive to price increases."

McDonald's is growing rapidly in Australia at the moment. It is planning to open 79 new stores over the next two years and is also boosting its advertising budget.

News of the new pricing scheme drew some tough talk from South Australia's Consumer Affairs Minister, Gail Gago.

"What we have is a multinational corporation, fast food outlet, deliberately setting out to take advantage of and exploit low income mums and dads and families," she said.

"I find that incredibly appalling and disappointing."

However, Ms Gago has also acknowledged that there is little governments can do about any company's pricing.

"Differential pricing structures are not illegal, so there's nothing I can do about that," she said.

"However, if they do advertise a product, say, on TV and charge something differently at an outlet, that could be misleading advertising."

McDonald's released a statement saying that it does not base its pricing on the socio-economic status of its customers.

The company says it is conscious of the economic challenges faced by many families.

It says it believes customers will continue to view McDonald's as providing value for money.

Christopher Zinn from Choice offers other advice.

"Our response is to encourage people, go to competitors. If you don't like what McDonald's is doing, seek elsewhere," he said.

"There are competitors, there are cheaper, there are healthier and most of all, prepare food at home. That is the cheapest and healthiest of all."

- RADIO AUSTRALIA, NZ HERALD STAFF