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Nov 11, 2012

Major retailers lawyering their way to dominance

The state of play in Queensland. Source: The Courier-Mail
Depending on who you listen to, nasty, bad old Deputy Premier and Planning Minister Jeff Seeney, has intervened in a legal challenge to the establishment of a Costco warehouse and retail development at North Lakes.  The development, which is expected to cost over $100 million, was approved by Moreton Bay Regional Council in August but has been subjected to legal challenges.
The opposition comes from two major retailers, Westfield and IGA.  While cynics might be inclined to jump to the conclusion that these two are simply using legal maneuvers in an attempt to protect their dominance in the area, both claim to be acting out of pure altruism and community spirit.  They are claiming after all, that the development does not comply with the local town plan, and may have a detrimental effect; no, skip that; threaten the very survival of small business in the area.  
Us country boys tend to stand in wonderment at the sense of self-sacrifice and noblesse oblige of major retailers in standing up for the little guy who is threatened by the arrival of another mega store in the area. 
The reality is that the established major retail outlets are doing their damndest to use any legal recourse available to them to prevent any further competition taking hold.  Their favorite method is to use town-planning ordinances to their own benefit: 
The retail turf wars are stalling major shopping centre developments in Queensland, tying up a string of new projects in multimillion-dollar appeals, with centre owners and developers accused of entangling their competitors in red tape for years. 
Retail analysts say the result is that councils are lumbered with massive legal bills and shoppers face less choice and higher prices. More than 20 appeals against shopping centre and retail plans have been lodged in the Planning and Environment court in the past two years. 
Among them is an attempt by retail giant Westfield to block the state's first Costco outlet at North Lakes, north of Brisbane. 
The Newman Government has taken steps to "call in" the development, halting a legal stoush that could have dragged on for years. 
But the Costco case is only one in a long line of court battles between retail giants over proposed new centers.  And with the international giant casting about for Queensland sites - Costco is understood to be looking for a Brisbane Southside location as well - the battle is likely to grow more intense. 
Local Government Association of Queensland executive director Greg Hallam said competitor appeals ended up costing ratepayers millions of dollars in court fees.  "A couple of million dollars in court costs is not a problem for them," he said. … 
… "Because the cost of the development is more, the rent is more, so businesses have to turn over more - they've got to have more customers or increase their prices."  Mr Lord said the arrival of a competitor usually had a 20-25 per cent impact on an existing supermarket's business. 
A Westfield spokeswoman said submissions or appeals were made on a case-by-case basis and action taken based on planning grounds.  Budget supermarket chain Aldi has called on the State Government to take the heat out of the battle for the grocery dollar by releasing new development sites so consumers have more choice. ...
There has been a long-standing argument by well meaning people as to the existence of a ‘duopoly’ between Coles and Woolworths to dominate the retail market. The reality is that any major outlet will attempt to avoid competition by any means available.  Local planning laws are one of the best options for them in this effort, and end up costing local ratepayers a fortune.
This has been covered here before here: 

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