FGC’s revealing submission on restrictive supermarket leases has been acted on by a select committee.
The report-back on the Commerce (Grocery Sector Covenants) Amendment Bill by Parliament’s Economic Development, Science and Innovation Committee includes a proposal to broaden the scope of covenants affected by the bill to recognise other retailers that may compete with a designated grocery retailer.
The committee also voiced “deep concern” that supermarkets could seek to profit from the proposed ban by demanding compo for axing covenants.
In an oral submission, CEO Katherine Rich said they had been given a lease that banned a “vast” range of non-grocery retail neighbours in leases, set site conditions for years after a tenancy ends, and require landowners to object to new developments or district plans at their own cost.
The lease showed the supermarket had defined its business as almost everything that can be sold by anybody, including clothing, fashion, luggage, sports and fitness goods, appliances, shoes, computers, insurance and lending, hair dressing services, banking, arts and crafts or childcare services – and they can all be banned under the terms of the lease.
Stuff has quoted a spokeswoman for Countdown confirming the existence of restrictive leases, saying such leases had been ‘‘common in the past for a range of commercial leases and, in our case, many of our leases are decades old’’. Countdown declined to say when it last included or enforced such a clause in a lease agreement.
Stuff also quoted the Commerce Commission saying it has “prioritised for further investigation’’ a number of supermarket land and lease covenants.