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Retailers welcome retail leasing report - ARA calls on Govt to strip away rhetoric and act now

Posted by: [deleted]1248313516.0722.5226 on Wed, 27 August 2008 14:38:45

Peak retail industry body the Australian Retailers Association (ARA) has today welcomed the recommendations in the Productivity Commission’s Market for Retail Tenancy Leases final report, but remains concerned about the Commission’s silence on the required disclosure of tenants’ turnover figures.

ARA's Executive Director Richard Evans said the well overdue release of the Productivity Commission's report on retail leasing has recommendations welcomed by retailers, including nationally consistent model legislation and the introduction of a voluntary code to curb robust behaviour. However, the Commission had still failed to recognise disclosure requirements of turnover as a significant form of tension between shopping centre tenants and landlords. "We are in a period of significant downturn in consumer demand and this report will come as good news for retailers, but with the significant caveat that the Rudd Government must now act to improve the retail tenancy market nationally. When other Federal Governments have ignored the issue as being too hard, the new Government - with its policy of reducing the cost burden of differing state legislations - must now act. "We encourage the Government to move forward with haste to help retailers with the following issues that must be addressed in any new legislative framework:

• Code of Conduct to improve operational and negotiation behaviour
• Full disclosure by the landlord of true rent and plans for the shopping centre
• Non-disclosure of turnover figures directly to the landlord
• End of lease negotiation
• Separation of shopping centres from other retail activity
• Low cost dispute mechanisms

"This report confirms what governments have been told for many, many years yet seemingly do not have the courage to resolve - that is major shopping centres are a very different retail market compared to strip and small retail sectors. These shopping centres operate in a virtual monopoly due to planning laws and therefore have restrictive competition practices within their negotiations with retail tenants. Tenants are at a disadvantage at the negotiation table due to one-sided disclosure requirements and this issue can be remedied by simplifying the legislative template nationally and applying a code of conduct. The challenge the Rudd Government has is to show leadership when others have not," Evans said.

For over 104 years, the Australian Retailers Association (ARA) has been the peak industry body in Australia's $292 billion retail sector which employs over 1.2 million people. As an incorporated employer body under the Workplace Relations Act and with a range of member services including business consulting, policy development, advocacy and education, the ARA promotes and protects over 5000 independent and national retailers throughout Australia. Visit www.retail.org.au or call 1300 368 041.

For interview opportunities with ARA Executive Director Richard Evans contact: Kath Christie, ARA Policy & Media T: 0422 293 544 E: kath.christie@retail.org.au

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