Andrew Barr

Boost for supermarket competition in the ACT

The ACT Government has announced a package of supermarket site releases in group centre redevelopments at Dickson and Kingston, and new developments at Casey and Amaroo in Gungahlin.
 
The package provides the opportunity for independent chain operators, including locally-grown independent chain Supabarn, to secure large format stores that will complement Supabarn's entry into fast-moving wholesale competition in the ACT.
 
It will also assist in the entry of a new ALDI store at Casey.
 
Chief Minister Jon Stanhope said the Government expected the first of the land sales for the new supermarkets to start within three months after site and marketing preparations.
 
The new supermarket in Kingston would require a variation to the Territory plan and this would probably take longer than the others.
 
"The Government is determined to offer Canberra families more choices, more suburban supermarkets and potentially cheaper prices," Mr Stanhope said.
 
This package is the culmination of several years' work to respond to community and Government concern that the domination of large format supermarkets by Woolworths and Coles provided insufficient choice for consumers and competitive tension.
 
"Woolworths and Coles have jointly controlled more than 70 per cent of the grocery dollar in Canberra, and, if convenience stores were taken out, more than 90 per cent of large format supermarkets."
 
"Implementation of the Supermarket Competition Policy will result in greater competition and choice and potentially lower prices for Canberra shoppers."
 
Mr Stanhope said the ACT Government was encouraged by the 2008 Australian Competition and Consumer Commission Retail Grocery Report criticisms of impediments to new entrants to compete with major supermarket chains and lack of independent wholesale competition.
A review for the ACT Government by John Martin, a former commissioner of the ACCC, found grounds for some intervention by the Government to correct distortions and create competitive tension.
 
The Martin Review, which was accepted by the ACT Government and released in September 2009 recommended factoring competition and flexibility into planning, zoning and land release processes.
 
The Government took advice on the Martin Review from the inter-agency Supermarket Competition Co-ordination Committee, which considered competition factors and consulted stakeholders.
 
The Government decisions are as follows:
  • Kingston - To release a site in the Eyre Street car park for a 3400 sq metre Supabarn supermarket as part of a mixed development;
  • Dickson - To release a site for a large format supermarket to all players, except the incumbent Woolworths. The site, on the large surface car park adjacent to Woolworths, would be available for a store in excess of 2500 sq m;
  • Casey - To release sites for ALDI and Supabarn, with a possible further release in three years for a large format supermarket site; and
  • Amaroo - To release a site for a large format supermarket, with Woolworths and Coles excluded from participating.
 
Mr Stanhope said the package recognised that Supabarn would be opening a wholesale facility at Canberra Airport later this month. This facility would increase competition in the ACT's supermarket and wholesaling sector.
 
The package still provides opportunities for the major market forces - Woolworths and Coles - to expand and the Government has recently approved sales of land to enable Woolworths to expand in centres such as Charnwood.
 
As recently as last month Woolworths secured another supermarket site in Bonner.
 
The Government will make further announcements by the middle of the year on direct sales of land to enable supermarkets to expand in local centres such as Holt and Kambah.
 
The Government has a preference for land release by an open process, but application of the new supermarket policy will at times involve other methods, including restricted auction or other process.
 
In relation to Kingston, Casey and Amaroo, the approach will involve the release of land for a mixed development, with a pre-commitment to a selected supermarket operator.
 
This means that any developer will be able to bid for the development of these centres.