The Australian Competition and Consumer Commission has announced that agreement had been reached with Coles Group Limited and Woolworths Limited to phase out all restrictive provisions in supermarket leases.

Both companies have agreed that they will not include restrictive provisions in any new supermarket leases, and in the case of existing supermarket leases, they will not enforce restrictive provisions five years after commencement of trading. This phasing out in the case of current leases takes account of commercial arrangements and rental contracts already in place.

During its Grocery Inquiry in 2008, the ACCC identified a practice where supermarket operators would include tenancy terms which may have prevented shopping centre managers leasing space to any competing supermarkets. This had the potential to impose restrictions on the number of supermarket outlets in centres and consequently fewer options for consumers.

The agreement is in the form of a court enforceable undertaking that has been voluntarily provided by Coles and Woolworths.