Supabarn to phase out restrictive leases

Posted by Nicole Eckersley on 6th May 2011

Supabarn Supermarkets Pty Ltd has agreed not to enter into new restrictive provisions in supermarket lease agreements, the Australian Competition and Consumer Commission announced today.

The ACT-based group is a family owned and run supermarket operator with five full service stores in the ACT and NSW, including one in the Canberra Centre in Canberra’s CBD.

Supabarn has undertaken not to seek any restrictive provisions in new leases. Supabarn only has one existing supermarket lease containing a restrictive provision, in its Canberra Centre lease. This restrictive covenant will expire in November 2016, and Supabarn has undertaken not to renew the restrictive covenant after that date. Supabarn has also undertaken not to enforce this restrictive provision in relation to any expansion of the existing Canberra Centre outside a limited, defined area at the rear of the Canberra Centre.

Coles Group Limited and Woolworths Limited agreed to phase out restrictive lease provisions in 2009, with ALDI Foods Pty Ltd, Franklins Pty Ltd, SPAR Australia Limited, Australian United Retailers Limited (trading as Foodworks) and Metcash Limited agreeing in February 2010.

“This undertaking by Supabarn now concludes the ACCC’s program to ensure that leases between grocery retailers and shopping centres will not potentially restrict competition,” ACCC chairman Graeme Samuel said.

“The ACCC has been committed to phasing out restrictive provisions in supermarket leases since it carried out the Grocery Inquiry in 2008.”

As with the agreements reached with other supermarket chains, Supabarn’s agreement is in the form of court enforceable undertaking which has been provided voluntarily.