Shopping Centre Council tells ACCC it won’t cooperate on retail tenancy code of conduct

The Shopping Centre Council has upped its opposition to a long-awaited retail tenancy code of conduct, telling the competition regulator that it will not engage with the Franchise Council of Australia on the proposed code.

FCA executive director Steve Wright says progress has been made on the voluntary code, which is designed to stem conflict between landlords and tenants about rental increases, end-of-term arrangements, fit-out requirements, and abuse of market power where landlords offer contracts on a ‘take it or leave it’ basis.

The code will be up for discussion at a retail forum in Sydney tomorrow, alongside other ideas such as a payroll tax freeze, government assistance for small business and occupational health and safety.

Wright says although the SCC has clearly stated its opposition to the code, the FCA remains hopeful an agreement can be reached – particularly if it helps lead to harmonisation of retail tenancy laws across the country.

The guidelines are designed to give retailers confidence about security of tenure, and are particularly relevant given poor occupancy rates in shopping centres across North America, Wright says.

The Australian Competition and Consumer Commission said this morning that it had not yet received a completed code from the FCA. The ACCC assists industries with voluntary codes to ensure they contain no anti-competitive elements, but its assistance does not amount to an endorsement of a code.

But the SCC, which represents shopping centre owners and managers, has decried the proposed code as a “media stunt” and has told the FCA and the ACCC that it will not discuss the matter.

In a letter last week to ACCC chairman Rod Sims, SCC executive director Milton Cockburn writes: “Given that Australia already has the most highly regulated retail tenancy industry in the Western world, we have no intention of adding to that already considerable volume of regulation through the adoption of a code of conduct.”

The SCC also says the code would only add to existing regulations, and has called for the franchise body to look at its own backyard.

“Most sensible people would support replacing the existing state and territory regulation of retail tenancies with a single national approach but this is not what the FCA has in mind.”

“Instead the FCA is apparently proposing an additional national code of practice which would sit on top of the existing state and territory legislation.”

The SCC says retail leasing is already much better regulated than laws covering franchising.

“State and territory legislation governs every aspect of the retail tenancy relationship, beginning even before the lease is entered into. The legislation contains financial and other penalties for non-compliance,” it says.

“The FCA wants even more rules to apply to retail leasing which, by contrast, already has far too many rules.”