By Aimee Chanthadavong

An examination into a floor space cap for individual supermarket operations is currently being undertaken by the ACT government.

The floor space test comes as response to a request by the Australian Competition and Consumer Commission (ACCC) in 2008 for all jurisdictions to investigate ways to challenge the dominance of the major chains Coles and Woolworths.

Jon Stanhope, ACT chief minister, said the floor space test, which is part of an ongoing review of the 2010 Supermarket Competition Policy to boost supermarket competition in the sector, has been welcomed by existing retailers.

“There has been widespread support amongst the community and generally in the retail sector for government intervention to challenge the market dominance of the major players,” he said.

“The independent supermarket sector has expressed concern that more needs to be done to ensure they are given the opportunity to realise their competitive potential – and to this end the government is encouraging the expansion of local stores.

 “We expect most retailers will see the floor space dominance test as a further refinement of the government’s policy direction.”

The floor space test is based on a scheme in NSW where any applications for development by a single operator that has more than 25 per cent of floor space in a single industry automatically receives greater scrutiny.

According to Stanhope, the review of the success of the Policy would also examine issues such as the optimum retail mix in local centres and the possibility of a cap on the proportional size of a supermarket in a local shopping centre.

Initial findings of the review are expected for the first half of the year.