For years, in many remote Indigenous communities only one hardy local grocery store has been able to survive.

Key points: Kung Fu Chinese takeaway store in direct competition with the Indigenous-owned Ngukurr General Store

Kung Fu Chinese takeaway store in direct competition with the Indigenous-owned Ngukurr General Store Yugul Mangi Development Aboriginal Corporation says the opening jeopardises its funding model

Yugul Mangi Development Aboriginal Corporation says the opening jeopardises its funding model More competition better for residents and traditional owners, Northern Land Council says

But controversy is brewing, with some Indigenous-owned enterprises now having to compete with new Australian-Chinese start-ups.

Until May, in the Arnhem Land community of Ngukurr — around 630 kilometres south-east of Darwin — the Yugul Mangi Development Aboriginal Corporation-owned store had a monopoly on food sales.

The corporation had planned to use the profits to expand the building, and start selling clothes, fridges and washing machines.

"We had come up with a funding model to finance this operation, and now that Kung Fu have arrived we've had to step back from it," the corporation's chief executive Bill Blackley said.

Yugul Mangi estimates competition from Ngukurr's new Chinese takeaway store, opened by Kungfu Enterprise Pty Ltd last year, has shaved between $1 million — $1.5 million off its profits.

The Indigenous corporation said the loss had affected both the money it could put into its other business enterprises, and its community benefits fund, which it said assisted Ngukurr residents with the cost of funerals and going away to school.

'Knife in the back of the local community'

The Department of Prime Minister and Cabinet (PM&C) gave Kungfu Enterprise Pty Ltd one of the permissions it needed to operate in a Northern Territory Aboriginal community.

"It's just an appalling state of affairs when the Department of Prime Minister and Cabinet, which is supposed to be supporting Aboriginal economic development and community development, have done this and allowed this other business here," Mr Blackley said.

"That department and the Northern Land Council have facilitated this shop getting here into Ngukurr and basically stuck a knife in the back of the local community and put their economic development model at risk."

Until last year, the Ngukurr General Store had a monopoly on food sales. ( ABC News: Jane Bardon )

The Department of Prime Minister and Cabinet said competition was "vital for the functioning of a market economy and works to benefit consumers".

"New businesses trading in remote Indigenous communities in the Northern Territory … are granted a period of time to establish themselves in the community," the department said in a statement.

"If they become an important source of food for the community, they then may be required to hold a community store licence to continue trading.

"The [law] does not distinguish between community-owned and externally owned stores.

"Consultations in the community about whether or not the Kung Fu Enterprise store is an important source of food and drink are planned to commence shortly."

'No involvement' from locals, corporation claims

The Northern Land Council also gave the takeaway outlet permission to operate.

Chairman of the Yugul Mangi Aboriginal Development Corporation, Bobby Nungumajbarr, said the council had not consulted with the whole Ngukurr community about whether they wanted the store.

Mr Nungumajbarr is concerned the Ngukurr community has not been consulted about the store. ( ABC News: Jane Bardon )

"The consultation has never been done the proper way in our community, no involvement from the community," he said.

The Northern Land Council's chief executive Joe Morrison said it was up to Ngukurr's traditional owners to decide whether to allow the Chinese takeaway store to open.

"The information was presented to the traditional owner group in relation to that business and what the business was purporting to do," he said.

"And traditional owners gave their consent for that to proceed."

New store meeting demand

Kung Fu Enterprise owner Aihua Feng said Ngukurr traditional owners invited her to open a second food shop in their community after they had bought food in her Chinese takeaway store in Borroloola.

"Because they are very very keen to bring in competition to the community, to reduce the high grocery price, and also provide more healthy food and more variety of food," she said.

Ms Feng said it had been costly and challenging to establish her remote community businesses.

She said she had spent $700,000 refitting her shop in Ngukurr, and also owns Chinese takeaway businesses in Borroloola, Maningrida and Halls Creek.

Kung Fu Enterprise owner Aihua Feng said her shop provided a service Ngukurr needed ( Supplied: Aihua Feng )

She said she kept her shop open until 8:00pm, after the Yugul Mangi owned store has closed in the afternoon, to supply a previously unmet demand for food in the evening.

"Also, in communities many households depend on power cards so when the big shop closes, if their power card credit runs out that means they have no power the whole night," she said.

"And now with the late night service they can also buy infant milk formula when they run out at night."

Ms Feng said her business has also provided community grants to subsidise sports and job training.

"For the population size, Ngukurr definitely can support two shops," she said.

"One shop I think is really a basic lack of facility to the community, and competition has reduced the prices."

'The more competition, the better'

Staff working at the store also told the ABC they thought having two food shops in Ngukurr had made prices more competitive.

Mr Morrison said that should be the outcome.

"Ngukurr is a micro-economy, and if you compare it to places like Darwin, there's various businesses competing in the same retail space," he said.

"The more competition there is, the better it is, I think, for the residents and the traditional owners of these communities to be able to purchase their products."

Mr Blackley said those arguments were "rubbish", because Ngukurr did not have a "classic economic development model".

"To say we're going to have to transfer a mainstream economic model and competition to a place like Ngukurr it just an absolute nonsense," he said.

The Northern Land Council said competition from the takeaway store (pictured) would be beneficial. ( ABC News: Jane Bardon )

When visited by the ABC, both Ngukurr's food shops were busy with customers.

The Yugul Mangi store was popular during the day, while the Chinese takeaway store drew in a number of residents at night, once the Indigenous-owned store had closed.

In recent years, a Chinese takeaway store has also opened in nearby Minyerri, which also remains open past the community store's opening hours.

The newcomers have been among very few private businesses prepared to take a punt on investing in the Northern Territory's remote Indigenous communities.