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Kaufland stores in Victoria:

Advisory Committee

Tranche 3 – Pakenham Proposal

Statement of evidence of Anthony Dimasi

28 November 2019

Dimasi & Co

Tony Dimasi

[email protected]

Table of contents

Expert witness details 1

Introduction 3

1. Submissions received 4

2. Response to submissions 6

Appendix 1: Curriculum Vitae 8

Kaufland stores in Victoria: Advisory Committee

Tranche 3 – Pakenham Proposal 1

Statement of Evidence of Anthony Dimasi

Expert witness details

Name and address of expert

Mr Tony Dimasi

Economic Consultant

Dimasi & Co

12 Argent Court

Riddells Creek VIC 3431

[email protected]

Expert’s qualifications and experience

• Bachelor of Arts (Hons.), University of Melbourne

• Master of Arts, University of Melbourne

My CV is included as Appendix 1 to this statement of evidence. I have extensive experience

in the field of retail economics and analysis gained over the past 32 years, having provided

independent advice on numerous retail development projects and proposals throughout

all parts of Australia, to a broad range of clients.

Expert’s area of expertise

• I have practised as a consulting economic and retail analyst since 1982. During that

time I have worked in all states of Australia and also in New Zealand and Asia, and

have advised on many thousands of retail developments of all types and sizes.

• My assessments have covered demand and supply analysis, commercial feasibility

assessments and economic impact assessments, for many thousands of shopping

centres of all sizes and mixes, as well as numerous freestanding retail stores, including

supermarkets, discount department stores, toys category killer stores, book stores,

special apparel stores, smaller foodstores and packaged liquor stores of all sizes.

• I have appeared as an expert witness in the various jurisdictions across all states of

Australia and New Zealand on numerous occasions, including:

- The Administrative Appeals Tribunal (AAT) of Australia;

- The Land and Environment Court of New South Wales;

- Independent Ministerial Panels and VCAT in Victoria;

- The Planning and Environment Court of Queensland;

Expert witness details




- The State Administrative Tribunal in Western Australia;

- The Environment, Resources and Development Court of South Australia;

- The Resource Development Planning Commission in Tasmania;

- The Liquor Licensing Court of South Australia; and

- The Petroleum Products Retail Outlets Board of South Australia.

I have also appeared as an expert witness before various government and ACCC

inquiries into the retailing of food, liquor and groceries industry in Australia, including:

- the 1999 Joint Parliamentary Inquiry into the Australian Retail Sector (the Baird

Inquiry);

- the Inquiry into the Competitiveness of Retail Prices for Standard Groceries (2008)

undertaken by the Australian Consumer and Competition Commission (ACCC);

and

- the 2004 ACT Grocery Inquiry (the Martin Inquiry).

• Over the past 37 years I have provided, and continue to provide, research and

advisory services to a wide range of clients, including major retailers and most of

Australia’s shopping centre management and development groups.

• I have undertaken work on numerous occasions throughout the Pakenham region

relating to both existing and proposed retail developments.

I have made all the inquiries that I believe are desirable and appropriate and no matters of

significance which I regard as relevant have to my knowledge been withheld from the

Advisory Committee.

Anthony Dimasi

28 November 2019




Introduction

This statement focusses on the matter of economic impacts relating to the proposed

Kaufland store at Pakenham. The statement has been prepared, for the assistance of the

Advisory Committee, on the instructions of Planning & Property Partners, acting for

Kaufland Australia Pty Ltd.

I have previously prepared an Economic Impact Assessment (EIA) for the proposed

Kaufland development at Pakenham, and I adopt the prepared EIA as my expert evidence

in this case.

I have now had the opportunity of reading the various submissions made to the Committee

on this proposal, and in the balance of this statement I respond to the matters relating to

economic impact that have been raised in those submissions.




1. Submissions received

1.1 There are nine submissions made in relation to the proposed Kaufland store at

Pakenham and two of those submissions refer to economic impact matters, those

being submissions made by:

i. Cardinia Shire Council (Cardinia); and

ii. QACPF Pakenham Place Pty. Ltd., owner of Pakenham Place shopping centre

(Pakenham Place);

1.2 The submission from Cardinia Shire Council notes under sub-heading 3. Out of Centre

Development and Economic Impact as follows:

‘While Council acknowledges the findings of the exhibited Economic

Impact Assessment with respect to the promotion of additional jobs and

trade competition and minimal impact on existing facilities, it is considered

that the development would have an overall negative impact on the

economy and on the viability of future and existing activity centres.’

1.3 The Cardinia submission also states that:

‘The trade area for the proposal would reasonably overlap with that of the

existing Pakenham Major Activity Centre and the future Officer Major

Activity Centre. By encroaching into the existing trade area for Pakenham,

the proposal threatens the ongoing economic viability of this Major Activity

Centre. By encroaching into the future trade area for Officer, the proposal

prejudices the future viability and developability of this Major Activity

Centre.’

and further that

Therefore, whilst the proposal may result in some economic and social

benefits, these have not been balanced with consideration of the impact

of the development on the municipality’s planned activity centres. The

overall impact of the proposal on the Lakeside Neighbourhood Activity

Centre, existing Pakenham Major Activity Centre and future Officer Major

Activity Centre is therefore considered to be a community dis-benefit which

is not outweighed by possible benefits.’

1 Submissions received




1.4 The Cardinia submission also claims that regard should be had, in any impact

assessment of the Kaufland proposal, for a proposed development for which Council

has recently refused a planning application on a site at 900 Princes Highway,

Pakenham.

1.5 The submission from Pakenham Place makes the following comments in relation to

economic impacts:

• The proposed development of Kaufland Pakenham would draw trade

away from and have a harmful economic impact on existing and

carefully planned activity centres in Pakenham.

• There is no demonstrable need for the construction of a multi-use retail

development, including a hypermarket, at this location.




2. Response to submissions

2.1 Both of the objecting submissions which refer to economic impact, and in particular

the Cardinia submission, appear to be based on the view that no level of trade impact

is acceptable on any existing or planned activity centre which forms part of the

prevailing retail hierarchy, and that there is automatically a community disbenefit

simply as a consequence of any such impact. I do not accept that proposition, and

in my view there is no community disbenefit incurred simply as a result of some trade

competition, particularly within a rapidly growing catchment.

2.2 In this regard the position put in the Cardinia submission appears inconsistent in that

the submission explicitly acknowledges, on the third page, the findings of the exhibited

EIA, in particular:

- the promotion of additional jobs and trade competition: and

- minimal impact on existing facilities.

2.3 Despite that acknowledgement the submission then goes on to state that it considers

that the proposed Kaufland development would have an ‘… overall negative impact

on the economy and on the viability of the future and existing activity centres.’ These

two statements cannot both be correct. If, as Cardinia acknowledges, the proposal

would result in the promotion of additional jobs and trade competition as well as

minimal impact on existing facilities, then it is not logical to also conclude that the

development would have an overall negative impact on the economy and on the

viability of future and existing activity centres.

2.4 The Cardinia submission also claims that the economic and social benefits that would

result from the proposal have not ‘… been balanced with consideration of the impact

of the development on the municipality’s planned activity centres’. In my view that

is not the case. The EIA dealt with the question of likely impacts on existing centres,

and also considered the additional facilities to be provided at planned activity

centres in the growth areas to the west and east of Pakenham.

2.5 With regard to existing activity centres the EIA concluded that there would be impacts

of various magnitudes on those centres ranging from 4% to 8.7% and averaging 5.5%

following the first year of the Kaufland store’s construction. However, as pointed out in

the EIA those impacts would occur against the background of a very rapidly growing

trade area. First, between 2019 and the likely first year of trading of the Kaufland store

2 Response to submissions




(assumed in the EIA to be 2022) the available retail expenditure generated by the

trade area population is estimated to increase, in real terms, by approximately 27%.

Further, in the nine years after the Kaufland store is assumed to open, the available

food & groceries expenditure is estimated to increase by some $250 million in real

terms or more than five times the likely sales volume of the Kaufland store.

Underpinning these estimates is the planned population growth within the Pakenham

area, in particular the forecast increase in the population of the defined trade area

which will total 56,510 between 2019 and 2031.

2.6 In broad terms, at an average rate of provision of approximately 2 sq.m per person,

this population growth alone will warrant the addition of some 112,000 sq.m of retail

floorspace over the next 12 years, including more than 20,000 sq.m of supermarket

floorspace.

2.7 It is not reasonable, given this context and given these forecasts, to claim that one

retail development of approximately 6,000 sq.m and which will not be built for at least

another three years and possibly longer, will jeopardise either the existing network of

activity centres or any planned future activity centre.

2.8 It is also not reasonable to claim, as the submission from Cardinia Council does, that

Kaufland should also have regard, in preparing an economic impact assessment for

its proposal, for another retail development for which Council has refused a planning

application, at another location. With regard to the particular development referred

to (at 900 Princes Highway, Pakenham) the desire of Coles to relocate from its existing

smaller store in the Village Lakeside neighbourhood centre to a larger store as part of

the proposal, as well as the desire of Kmart to locate a new store also as part of that

proposal, highlights the growth in retail demand within the relevant area. That

proposal also highlights the preferences and requirements of major retailers for

locations on sites which offer convenient accessibility as well as exposure and visibility

to prospective customers.

2.9 With regard to the Pakenham Place submission, the estimated impact on the

Pakenham Centre as set out in the EIA is 4%-5%. Again, given the trade area growth

that will occur, such an impact does not pose any threat to the future of that centre

and indeed a new Aldi supermarket is now approved within the Pakenham Centre.

Appendix 1: Curriculum Vitae

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