New ACT grocery laws a sign of things to come?

Posted by Daniel Palmer on 8th October 2009

A policy review in the ACT is set to see Coles, Woolworths and IGA ineligible to bid for certain sites.

Chief Minister and Minister for Business and Economic Development Jon Stanhope released the outcomes of the review into ACT supermarket competition policy yesterday.

The review, carried out by former ACCC Commissioner John Martin, is designed to improve market access for the independents. It was prompted by the July 2008 ACCC Inquiry into retail grocery prices that recommended that governments consider ways in which zoning and planning laws could be used to promote new entrants in retail grocery markets.

The ACT is the first jurisdiction in Australia to provide a comprehensive response to the ACCC Inquiry.

“The ACT Government is aiming to ensure its supermarket policy is ‘best practice’ in light of the ACCC Grocery Inquiry and to have in place a policy that promotes and supports effective competition in the ACT sector,” Mr Stanhope claimed. “Effective competition means strong price-based competition, but it also means supporting players that promote quality, choice, convenience and service to Canberra households.”

“The recommendations of the Review will also help guide how current Territory Plan zone provisions for retail might be refined to accommodate greater flexibility in planning decisions.”

“Importantly, the Government has agreed to allow more supermarkets in group centres and permit supermarkets in local centres to expand. This will ultimately provide more choice for Canberra shoppers,” Mr Stanhope added, in reference to the decision to make the major supermarkets ineligible to apply for certain sites.

Coles, Woolworths and IGA will be permitted to bid for a shopping centre site if there is already a ‘major’ operator in the same suburb.

Aldi – which yesterday welcomed the move, Supabarn and Franklins appear set to be the main beneficiaries of the policy changes.

The plan is likely to be closely monitored by other governments and resembles a similar move trying to be forced through in the UK.