Choice Free Zone

19 May 2008

Allan Fels slams shopping centre laws in a new expert report.


Read the speech of Professor Allan Fels AO given at a Luncheon & Debate on Friday 25 July 2008. The speech is here.


Shoppers are paying far too much for their groceries because of restrictive out-of-date planning laws, according to a report by former ACCC Chairman, Professor Allan Fels.


And he says an overhaul of the NSW Governments Centres Policy would allow greater competition, leading to consumers paying up to 18 per cent less for food staples and up to 28 per cent less for other household products.


Professor Fels warns that under the present planning regime Governments appear to be up-holding anti-competitive processes that elsewhere would potentially considered to be contravening the Trade Practices Act.

The report by Professor Fels and Concept Economics is the most detailed analysis of the impact of planning policies on retail competition ever produced in Australia.

The planning system should be about protecting the community from congestion, noise and the loss of cultural and environmental assets, Professor Fels said.

Instead planning laws are protecting existing retail landlords from the threat of competition.

New supermarkets and larger food stores are being denied the opportunity to compete with existing shopping centres.

Less choice means higher prices for groceries and everyday household goods.

Other key points of the Fels Choice Free Zone report:


  • Reform of the system could amount to $78 billion in extra income for the NSW economy and $296 billion Australia-wide.
  • It would also be a boom for employment, delivering 147,000 jobs nationally and 47,000 jobs in NSW.
  • The report argues against present planning laws which effectively restrict supermarkets to established centres, resulting in traffic congestion and restrictive trade.
  • Major retail landlords in existing shopping centres were taking between 17 and 21 per cent of retail turnover as rent. This compares with 9 to 12 per cent in other countries.

Professor Fels says retail developments should be encouraged outside established shopping centres, easing the transport burden and encouraging more pedestrian friendly communities.

The report warns that current planning policies are not flexible enough to deal with Sydneys projected population increase of 1.1 million people to 5.3 million by 2031.

That population increase will require a 50 per cent increase in current retail space to meet demand.


Concept Economics is staffed by some of Australia’s most respected economists and experts in the areas of competition economics, public policy and regulatory analysis, and business strategy.


Purchase Professor Fel’s Report: Choice Free Zone as a book for $27.50 (inc. GST).


Or download it FREE as a PDF ( 1.4 MB)