Further agreements address restrictive supermarket leases

8 February 2010

The Australian Competition and Consumer Commission today announced further agreements with major supermarket operators to phase out restrictive provisions in supermarket leases.

ALDI Foods Pty Ltd, Franklins Pty Ltd, SPAR Australia Limited, Australian United Retailers Limited (trading as Foodworks) and Metcash Limited have all agreed with the ACCC, that they will not enter into any new leasing agreement which includes restrictive provisions and in the case of existing supermarket leases, will not enforce any restrictive provisions beyond five years after the commencement of trading.

The announcement follows similar agreements reached with Coles Group Limited and Woolworths Limited in September last year and is a significant achievement in further opening up competition in the industry.

As foreshadowed in September, the ACCC has been committed to the phasing out of this industry practice and has continued to engage with other supermarket operators, following the agreement reached with Coles and Woolworths in 2009.  This action taken by the ACCC will ensure that many more existing and future leases between grocery retailers and shopping centre landlords around Australia will not be impacted by restrictive provisions, thereby enabling greater competition.

"These further agreements with the next tier of supermarket operators mean that many more shopping centres will no longer be hamstrung by restrictive provisions in leases that prevent or hinder the entry of competing supermarkets," Australian Competition and Consumer Commission chairman Graeme Samuel said.

"These supermarkets, to their credit, have all acknowledged the concerns of the ACCC in respect to restrictive provisions and have acted responsibly in cooperating with the ACCC to phase out restrictive provisions."

As with the agreements reached with Coles and Woolworths, these further agreements are in the form of court enforceable undertakings which have been voluntarily provided.

The enforceable undertakings entered into to date mean that the vast majority of restrictive provisions in leases between supermarket operators and shopping centre landlords have now been dealt with.  The ACCC remains committed to addressing any remaining concerns and will do so on a case-by-case basis.

Related register records

Release number: 
NR 017/10
ACCC Infocentre: 

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Media enquiries: 
Mr Brent Rebecca - (02) 6243 1317
Mr Graeme Samuel - (03) 9290 1812