Page 4416 - Week 12 - Wednesday, 14 October 2009
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I think the Chief Minister is right: the devil will be in the detail. The report clearly says in recommendation 6:
An alternative source of wholesale supply would be encouraged by a restricted approach for particular sites that precluded Metcash-controlled ventures as well as the two major chains.
So I guess the question for the Chief Minister is: what is the wrong percentage? How much can you buy from Metcash before you are excluded? And at what point can you re-enter the market? The report says, two paragraphs above the recommendation:
As the ACCC Report identified the opportunity exists for the entry of a second wholesaler to compete with Metcash. That could also provide an alternative source of wholesale supply for smaller ACT independents. The most obvious scenario could involve a strategic alliance with the only vertally-integrated full-line independent chain Franklins which currently has 80 stores in New South Wales.
We all know the history of Franklins in the ACT. So, yes, the opportunity might exist, but this is when we start interfering with the market. I want to just reflect on previous attempts in the ACT where the planning system has come head to head with the market as such, and indeed with people’s personal preferences—and retail shopping can be a very personal thing.
The report by John Martin into the ACT’s retail industry is a most significant report. As we consider this report there are some critical factors that must also not be ignored. Some of these are touched on in the report, but I think they need to be explored further.
First, we must not forget our history. Let us consider the history of Kambah in the early 70s and the early 80s, and it is an area I know well. My family were the first provider of newsagency services into Kambah, into the Tuggeranong Valley. When Kambah was developed there were five retail centres in that suburb. At that time the nearest major retail centres were in the Woden Valley, and we all know as it developed Erindale came on, we saw the Hyperdome, we saw the Woden Plaza expand and initially for a number of years each of those centres flourished. But as the Tuggeranong Valley grew and major retail centres were developed, most of the centres in Kambah closed. Basically, today, there is the Kambah Village with a Woolies store, and the other sites either just do not exist or continue in a very much reduced form.
Consider the same history of Civic. A number of retail premises in Civic have not succeeded over the years. I recall a retailer that started in Allara Street some years ago. It did not last that long. Why? Was it too small? Was it in the wrong place? Was it too far ahead of the evolution of more retail premises in the CBD? Who knows. But it failed.
Ultimately, the market—that is, competitive pressure—will determine what happens in the retail industry, as in all other industries. If we are going to do this for supermarkets, will we do it for other areas? Will we do it in the area, for instance, of landlords and rents? Will we interfere in that way as well?
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