Dunkley was taken to Yangon's Western District Court on Friday along with another westerner, John McKenzie, and five local women aged between 19 and 29, The Irrawaddy online reported.

Associate Judge U Nyi Nyi Aye said all seven were charged under sections 19 (a) and 21 of the anti-narcotics law.

Section 19 (a) covers possession and trafficking for sale and carries a minimum penalty of 10 years' jail up to a maximum of "unlimited time in prison".

Dunkley and McKenzie were accompanied by their defence lawyers. The women had no legal representation but promised to bring them to the next hearing set for July 12.

All seven were taken into custody after a June 7 raid on Dunkley's rented home in Bahan township, Yangon, during which police allegedly seized 797 yaba pills and 303 grams of crystal methamphetamine, or "ice".

Charges against Dunkley's maid and guard, who were also detained during the raid, have been dropped on the recommendation of a police investigator.

Stuart Alan Becker, a friend and former colleague of Dunkley, said only relatives were allowed to visit the Australian in prison.

He said Dunkley's wife Cynda and two children, who are from Perth, were due to arrive in Yangon on July 17.

Dunkley is a former Walkley Award winner who founded and edited The Myanmar Times in 2000 and was also involved in the 2007 takeover of the Phnom Penh Post which was recently sold to Malaysian interests.

He had a rocky time in Myanmar trying to deal with the ruling junta, and fell out with the new owners after his business partner Sonny Swe was sentenced to 14 years' jail for breaching censorship laws.

In 2011, he was convicted of immigration offences along with the assault of a woman widely reported to be a sex worker and sentenced to a month's jail.

Dunkley returned to the media scene in Myanmar last year, setting up Beyond the Box Communications to provide "24-7 live streaming in Burmese", printing services and e-commerce events.

Australian Associated Press