Coles criticises “restrictive” ACT laws on supermarket competition

Posted by AFN Staff Writers on 16th April 2012

Australian supermarket chain Coles has told a Partliamentary Inquiry that competition policy in the Australian Capital Territory (ACT) is currently the “most restrictive in Australia” and is leaving consumers at a disadvantage.

The statement was made in Coles’ submission to the Legislative Assembly for the ACT Select Committee’s inquiry into supermarket competition.

The purpose of the inquiry is to review the ACT’s Supermarket Competition Policy (SCP), established in 2008, which seeks to maintain a balance of competitive retail performance.

In its submission, Coles calls for red tape to be removed from planning procedures so that the supermarket chain can open stores in some shopping centres it is currently restricted from do so.

Coles also asked the ACT Government to allow it to enter into a direct sale process that other supermarket chains have previously used.

Coles currently operates eight supermarkets in the ACT, representing seven per cent of the total ACT retail employment.

Coles’ desire to boost market share in ACT

Coles’ submission to the inquiry stated, “Coles is the only full-line supermarket provider in the ACT with the ability to compete aggressively with Woolworths on a sustained basis. Yet Woolworths dominates the ACT market with by far the largest market share of supermarket floorspace (41.5 per cent) and has benefited from the direct sale of land in the ACT.”

Coles’ submission pointed out that Aldi and independent supermarkets (Supabarn, IGA and Foodworks) are also well represented in the ACT market (with around 35 per cent of supermarket floorspace collectively).

By contrast, Coles is not currently a major force in the ACT market, with around half of Woolworths total supermarket share (24 per cent of the total market share of supermarket floorspace in the ACT).

Coles statement said, “Coles is the only supermarket operator in the ACT which has not benefitted from the sale of land for supermarkets through the direct sale process by the ACT  Government.

“To ensure the maintenance of Coles as a competitive participant in the market consideration must now be given to the provision of similar benefits to Coles through the Direct Sale process.”