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ACCC Ruling Allows Retailers To Collectively Bargain With Landlords During COVID-19

The ACCC has granted the Australian Retailers Association (ARA), including all its current and future members, temporary authorisation to share information relevant to negotiations during the COVID-19 pandemic. Usually, rental agreements between retailers and commercial landlords are entirely confidential.

The Australian Retailers Association currently has around 7,500 members. “The ACCC decision will level the playing field in negotiations between tenants and landlords, ensuring ARA members get a fair deal on their rents,” Paul Zahra, CEO of ARA, told ChannelNews.

While tenants will be able to share information during the crisis (if they wish), there are still some limits on what can be shared. Zahra told ChannelNews: “ARA members adversely affected by the COVID-19 pandemic are permitted to discuss and share information relevant to their collective negotiation which significantly strengthens their bargaining position, but not commercially sensitive rent information such as actual rent or proposed incentives from landlords.”

Tenants will be able to share the percentage of the rent reduction.

It is hoped that this ruling will give greater power to the federal government’s Mandatory Code of Conduct on SME Commercial Leasing Principles During COVID-19, which was passed in early April. Despite the code of conduct, a number of retailers told us last week that they had not successfully come to an agreement with the country’s largest commercial landlords.

“We need to maintain strong competition in the retail sector and supporting these businesses will help with economic recovery once the pandemic subsides,” ACCC Chair Rod Sims said. “We see a clear public benefit in allowing retailers to work together in the negotiations with landlords as it will help those tenants who are experiencing financial hardship during this pandemic to reach a fair outcome.”

The ACCC has stated that it will keep an eye on when these authorisations are no longer necessary.

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