05 August 2008
Todays Australian Competition and Consumer Commission (ACCC) call for the reform of town planning laws is a victory for anyone who wants to see more supermarket choice. This recommendation will finally drag town planning laws out of a Soviet era mentality into the 21st century, said Aaron Gadiel, chief executive of the Urban Taskforce.
The planning laws in each state have been stopping new large format grocery stores from servicing local communities, Mr Gadiel said.
The Bureau of Infrastructure, Transport and Regional Economics has found that consumers without paid 17 per cent more when they did not have ready access to a supermarket.
We’ve been concerned for some time that the town planning laws were acting in an anticompetitive way and denying the opportunity for new entrants and existing players to offer choice to local communities.
This is official recognition that town planning laws are anticompetitive.
This is the ACCC saying there are serious limitations being imposed on grocery competition because of town planning laws and consumers are losing out.
If the ACCC reforms to planning laws are implemented we will have an historic reform.
Town planning laws will be dragged out of the 1980s Eastern European mentality and will have to embrace the idea of competition.
That means ensuring there is enough zoned land available to enable entrepreneurs to build new supermarkets to meet the needs of local markets.
There’s an undersupply in major cities and that has come about because of constraints imposed by the planning system.
The Report of the ACCC inquiry into the competitiveness of retail prices for standard groceries concluded that zoning and planning regimes act as an artificial barrier to new supermarkets.
The ACCC found that the limitation on competition was potentially impacting on competition between supermarkets.
The ACCC said that [T]he centres policy… is likely to lead to a greater concentration of supermarket sites in the hands of the [major supermarket chains] … In particular, such policies, by limiting opportunities for new developments, contribute to increasing the level of concentration in the retail grocery sector.
The ACCC recommended that zoning and planning polices, and, in particular, consideration of individual planning applications, should have specific regard to competition issues – specifically, whether proposed developments would assist in facilitating the entry into an area of a supermarket operator that is not presently operating in the area.
The Urban Taskforce is a property development industry group, representing Australias most prominent property developers and equity financiers.
