The proposed project involves the creation of a national database that hosts store rental information. It would allow jewellers to compare their tenancy rates against other businesses in shopping centres to ascertain if their lease costs are overpriced and above what others are paying.
Many industry experts say that jewellers are forced to pay much higher rents than other retail categories. Jewellers Association of Australia (JAA) director Colin Pocklington said that the purpose of the project was to assist jewellers in negotiating new leases.
However, before a national database can be developed it must be approved by the Australian Competition and Consumer Commission (ACCC).
Pocklington explained that currently all leases in New South Wales, Queensland and the Australian Capital Territory must be registered with state land titles offices. That information can be purchased from information providers such as Sydney-based Leasing Information Services.
The JAA is aiming to develop a similar set-up for all other states and territories so jewellery retailers can achieve national comparisons that can be used when negotiating with powerful shopping centre landlords.
While high rental costs are arguably a challenge faced by the entire retail sector, Pocklington reiterated that jewellery stores pay 16 per cent more in rent per square metre than the average of all other speciality retailers.
This issue has been blamed for the closure of a number of jewellery stores in recent years, and was notably a factor in the collapse of jewellery chain Bevilles.
Involving the ACCC
JAA president Selwyn Brandt explained that due to the “technical nature” of cartel laws in the Competition and Consumer Act 2010, the JAA had sought approval from the ACCC.
The issues relate to subsection 88 (6A) – Anti-competitive disclosure of pricing and other information of the Act, which covers the collusion of price or other behaviour.
As a result, the consumer watchdog is currently collecting market information from jewellery retailers and other interested parties – including shopping centre landlords – to determine whether there is any opposition to the JAA’s application.
Pocklington said he expected some large shopping centre landlords would object to the proposal. “A lot of them [landlords] put conditions in leases now that do not allow you to reveal your rental information.”
Once the ACCC has completed its survey, it will consider all submissions and may request more information from the JAA before making a decision on whether or not to authorise the database.
Submissions from retailers and other interested parties close 18 July, and the ACCC is expected to make a decision in November.
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