Page 4405 - Week 12 - Wednesday, 14 October 2009
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The key findings of the Martin review are, firstly, that supermarket competition policy in the ACT requires substantial overhaul to address impediments in the planning and development regime. The rigid hierarchy of retail organisations in the ACT is not conducive to an environment of competitive tension now or in the future. It was also noted that the ACT’s land and planning regulatory system should take much stronger account of competition outcomes in the supermarket sector. It should do this by reference to a formal competition policy framework that addresses the planning barriers to new entrants.
The review also concluded that entry of new full-line independent supermarkets and new stores should be facilitated in the new town centres of Gungahlin and Molonglo. Entry of further full-line independent supermarkets and new stores should also be allowed in group centres in the ACT. Independent supermarkets in local centres should be permitted to expand to allow them to compete more effectively for local shoppers. The review also noted that stronger supermarkets in local centres will also help to revitalise centres that are in decline. The review found that urgent attention should be given to the redevelopment of Kingston and Dickson to include facilitating the entry of new stores and further full-line independent supermarkets.
Importantly, the review found that there needs to be more systematic cooperation between ACTPLA, the LDA, Treasury and the Chief Minister’s Department in supermarket planning and related competition policy. A forum should also be created to engage with industry stakeholders more actively and include the views of consumers. The review found that the ACT government should facilitate direct land sales or restricted auction on a case by case basis to promote new entrants that engender competitive tension. And, finally, the review found that the ACT government should support the establishment of additional wholesale operations in the ACT as a way of supporting independents and creating a stronger market for locally supplied goods and produce.
The government welcomes the Martin review and supports the recommendations. It believes that the implementation of the recommendations will promote further competition in both the retail and the wholesale supermarket sectors. An implementation plan is currently being developed by the Chief Minister’s Department and has a deadline of eight weeks. This again shows the commitment by the ACT government to capitalise on the interest generated by the review and to accelerate business investment and employment in the ACT.
The ACT is the first jurisdiction to provide a comprehensive response to the ACCC retail grocery inquiry in 2008. The response to the review by industry, the business community and various community organisations has been positive. Industry participants have expressed support of the new policy and have acknowledged that the new policy will “provide a window of opportunity to further grow their businesses, increase their buying power and become true competitors to the two major chains”. Some concern, however, has been expressed that the IGA retailers might be excluded from sites, given their relationship with Metcash. It is not intended to exclude IGA stores from site consideration. On the contrary, the IGA network will be encouraged to expand at the local centre level.
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