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Legislative Assembly for the ACT: 2003 Week 13 Hansard (27 November) . . Page.. 4816 ..

MR CORBELL (continuing):

chains. Indeed, the other major national supermarket chain also has a significant presence in Canberra.

We know that getting Aldi into the market is a good way to improve competition in the market and force those major supermarket chains to discount their products and stay competitive. That is good news for the people of Canberra, especially in West Belconnen and the Lanyon Valley, as well as those people in Gungahlin and in Tuggeranong who are about to reap or who already reap the benefits of an Aldi nearby.

The decision behind the direct grant is premised not only on access to cheaper groceries but also on the concern that, had these sites been released through a competitive process, which is the government's normal, preferred approach, we might have seen Aldi kept out of the market through some sort of bidding process. We did not want to see that outcome; we wanted to see more Aldi supermarkets in Canberra and cheaper groceries for Canberrans.

MS MacDONALD: What benefits will this decision deliver the Canberra community?

MR CORBELL: In detail, on top of the objective of cheaper groceries, it is worth having a look at the analysis that has underpinned the government's decision. As I said earlier, the preference of the government is for a competitive process, but direct sales will be considered where the public benefit outweighs the benefits likely to be gained through such a process.

In looking at this, the government was very conscious of work done by the Australian Consumers Association, which, in its most recent Choice survey on the standard basket of groceries sold at various supermarkets across Australia, ranked Canberra seventeenth, with a basket costing $102.07, compared to Newcastle, with a basket price of $96.40, or even Sydney, with a price of $101.07. Canberra is more expensive than equivalent centres, like Newcastle, and larger centres, like Sydney.

We know that Aldi delivers lower prices in-store and prompts discounting by its competitors. It is worth consulting the analysis-also conducted by the Australian Consumers Association, through Choice magazine-that found that products cost $59.20, compared to the average price of over $100 for similar goods at other supermarkets. A recent report by Deutsche Bank shows that Aldi has a significant impact on prices at nearby Woolworths and Coles stores. After surveying prices at Coles and Woolworths supermarkets, it concluded that prices declined on average by 4.2 per cent after Aldi opened a store nearby.

Those are the real benefits that we hope will flow to the Canberra community as a result of the government intervention to ensure that Aldi has a strong and competitive base in the ACT and that it has a sufficient number of stores to justify its ongoing operations in Canberra, in particular in relation to the supply chain and the supply of products and services. Now, with these sites in Lanyon Valley and West Belconnen, the government is committing itself to ensuring that Canberrans get access to the cheaper groceries they need and greater competition in the supermarket area.

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