ARA supports clampdown on restrictive leases

Posted by Isobel Drake on 5th August 2009

The Australian Retailers Association has welcomed an ACCC investigation into restrictive lease arrangements between shopping centre landlords and tenants.

The ACCC and Federal Government reported this week that they were looking to rid the country of restrictive lease agreements that prevent more than one supermarket chain operating in a shopping centre.

A move supported by ARA Executive Director Russell Zimmerman, who said many restrictive clauses in shopping centre leases promoted anti-competitive behaviour across a number of retail categories.”The ACCC’s preliminary investigations have already highlighted the anti-competitive nature of restrictive clauses in shopping centre leases by limiting consumer choice,” Zimmerman said. “Without restricting this debate to the grocery market, the ARA welcomes any change to local planning laws and shopping centre lease arrangements that support retail competition across all sectors including clothing and footwear, department stores, household goods and specialty retailing.”

“Only a highly competitive marketplace will allow small retailers, larger national chains and international players to thrive and profit alongside each other.”

Last year, the Grocery Price Inquiry established that restrictive covenants were rife, with over 700 potentially violating the Trade Practices Act.ACCC Chairman Graeme Samuel said that the competition watchdog was intent on removing such covenants, regarding the anti-competitive nature of some lease agreements as “the single most important finding under the grocery inquiry”.