Like what you've read?

On Line Opinion is the only Australian site where you get all sides of the story. We don't
charge, but we need your support. Here�s how you can help.

  • Advertise

    We have a monthly audience of 70,000 and advertising packages from $200 a month.

  • Volunteer

    We always need commissioning editors and sub-editors.

  • Contribute

    Got something to say? Submit an essay.

 The National Forum   Donate   Your Account   On Line Opinion   Forum   Blogs   Polling   About   
On Line Opinion logo ON LINE OPINION - Australia's e-journal of social and political debate


On Line Opinion is a not-for-profit publication and relies on the generosity of its sponsors, editors and contributors. If you would like to help, contact us.


RSS 2.0

Supermarkets, shopping centres and the weaponisation of planning

By Ross Elliott - posted Friday, 26 April 2024

The current federal inquiry into anti-competitive practices of our large supermarket chains in Australia could do well to ask how planning schemes have been mercilessly weaponised to minimise competition. The allegations are not new. Remember Kaufland? Back in 2018 it was talking up its impact on the Australian grocery sector, which was (and remains) essentially a duopoly. Plenty of opportunity to challenge market power and establish a third major presence in the grocery sector. Or so they thought.

There were no doubt a number of factors that led Kaufland to sensationally pull out of Australia in 2020, but finding suitable sites was certainly one of them.

According to this analysis by KHQ Lawyers:


Finding appropriate sites has been a challenge for Kaufland. Although Kaufland has secured a variety of development locations, the fact that it announced its first store would be in South Australia (no offence, Prospect) indicates it was not an easy task. The eastern states, with higher populations and greater spending power would likely have been preferable.

With a store footprint anywhere from 4000m2 (i.e. larger than a standard Woolworths) to 20,000m2, the number of appropriate sites is probably limited – and will generally be in the outskirts of town and often separate from existing retail developments rather than in areas with a more concentrated population and accordingly greater customer catchment. Australia's highly restrictive planning laws and lack of development opportunities due to sub-optimal land use zoning (I'm looking at you, NSW) would have impacted any projected growth of the Kaufland network. Accordingly, the benefits of economies of scale will take longer to achieve.

There was also the problem that major suppliers to Woolworths and Coles felt intimidated that by supplying Kaufland, their existing contracts to Woolies and Coles would be jeopardised. The issue was investigated by the ACCC but nothing came of it. Kaufland left Australia, scalded by the encounter with our anti-competitive competition for the consumer dollar. The duopoly survived, and arguably grew stronger. The two now account for two out of three of all dollars spent in the sector.

The issue stretches back deep into planning law and the notion of a "retail hierarchy." What this means, in simple terms, is that the established pattern of retail stores – from city centre, to regional, district, neighbourhood etc – should be maintained, and that "allowing" planning permission for rival centres to be developed within the same arbitrarily defined catchment should be refused. To protect competition, we need to prevent competition.

This double-speak is now daily bread and butter for an entire industry of highly paid lawyers, planners, economists and others – including someone called "Brad" - who will argue that black is white if it suits their cause.

A senior Westfield executive once said to me: "Ross, we would object to a competitor moving a plant pot if we thought it was in our interests to do so." That was back in the late 1990s, during some heated debates about shopping centre trading hours. The arguments were put in favour of deregulation but in the end we did not end up with more competition.

Fast forward to today and the same allegations are resurfacing.


"There is a long-time pattern and behaviour, which is anti-competitive, which seeks to close out markets and remove competitors from the markets, and we've seen that happen over a long period of time," said Grant Ramage, Australian head of IGA, giving evidence to the federal inquiry.

"Their sheer scale gives them the financial capability to do that. It gives them greater sway with developers, landlords and other parties, like state governments," he said.

He was arguing that the duopoly were buying up new sites - not with a view to developing them, but to prevent competitors from buying the sites, or even prevent them buying another site within that arbitrarily defined future trade area. Hard to prove, and people like "Brad" will swear under oath it isn't true. But the suspicion lingers.

Locally, our IGA Milton store was a recent victim of these aggressive tactics. A very well supported store, with local owners (who owned and ran a total of three IGAs including this one) and friendly staff, it was open 365 days a year. But some years ago, then centre owners Vicinity sold the small shopping centre to Coles Property. Not so that Coles could own an IGA of course. Coles just waited for the IGA lease to run up for renewal, refused to renew, and so the IGA was forced to close. Coles are now in the process of building a larger store, presumably with computers rather than checkout staff and certainly with no local owners anywhere to be seen. And if someone wanted to open a new independent grocery store nearby, you can bet that Coles will take them to court if they have to, arguing that to protect competition, we need to prevent competition, giving due respect to prevailing planning law and practice – and the retail hierarchy.

Good luck to the Federal inquiry but I fear it will go nowhere. There's a conga line of self-interests masquerading as the consumers' champions who will ensure it doesn't.


  1. Pages:
  2. Page 1
  3. All

This article was first published on The Pulse.

Discuss in our Forums

See what other readers are saying about this article!

Click here to read & post comments.

6 posts so far.

Share this:
reddit this reddit thisbookmark with Del.icio.usdigg thisseed newsvineSeed NewsvineStumbleUpon StumbleUponsubmit to propellerkwoff it

About the Author

Ross Elliott is an industry consultant and business advisor, currently working with property economists Macroplan and engineers Calibre, among others.

Other articles by this Author

All articles by Ross Elliott

Creative Commons LicenseThis work is licensed under a Creative Commons License.

Photo of Ross Elliott
Article Tools
Comment 6 comments
Print Printable version
Subscribe Subscribe
Email Email a friend

About Us Search Discuss Feedback Legals Privacy