AACS: REGULATORY ISSUES UNDER THE SPOTLIGHT IN 2018

February 6, 2018: Long a source of frustration for retailers, unnecessary and onerous regulations can dampen trade and affect small businesses’ ability to compete with the major supermarkets. To counter, the Australasian Association of Convenience Stores (AACS) has signalled its intention to focus on several key legislative and regulatory issues in what is an election year in some states.
Addressing the various factors that impact the cost of doing business for small retailers like convenience stores is a key focus for the AACS this year, and AACS CEO Jeff Rogut says these factors are broad reaching.
“Factors like increases to the minimum wage, excessive taxes on products like legal tobacco, and the lack of choice for small retailers in processing tap-and-go payments all increase pressure on the cost of doing business while failing to recognise the important role convenience stores and other small businesses play in the community and economically,” Mr Rogut says.
“On the other hand, we have the major problem of crime in our industry. This issue is compounded by the inappropriate legislative and judicial response to those criminals who commit theft – or worse – as well as those involved in the illicit tobacco market.
“These issues can make or break a convenience store’s bottom line. So this year, the AACS is increasing pressure, rallying against unnecessary regulations, seeking stronger deterrents for criminals, and securing a better trading environment for small retailers like convenience stores.
“Our Association will remain vocal and active on these issues and we encourage convenience retailers and suppliers, as well as other retail businesses, to have their voices heard on the issues that affect them.
“This year is an election year in some states and while small business issues often struggle to gain the attention of politicians, the prospect of votes invariably does,” he says.
The cost of doing business
A plethora of factors influence the cost of doing business for convenience stores. In 2018, the push to raise the minimum wage through changes to casual employment, as well as the lack of choice in processing tap-and-go payments, loom as two major areas with the potential to significantly impact the bottom line of small retailers.
Mr Rogut says proposals to increase the minimum wage in Australia will have a counterproductive impact, squeezing small businesses while limiting their ability to employ more people and, ultimately, threatening jobs.
“Any push by the ACTU to change casual employment conditions and increase the minimum wage even further will have the opposite effect to that intended: increasing pressure on businesses, stifling growth and reducing employment opportunities,” Mr Rogut says.
“It also fails to account for the fact that many people desire greater flexibility in their work hours and schedules.”
Mr Rogut says tap-and-go card fees are another area under the spotlight this year.
“With tap-and-go payments becoming the norm, the cost of doing business for small retailers is impacted by the lack of choice to route these payments using the domestic eftpos system, so as to not incur higher international charges,” Mr Rogut says.
“As it stands, payments on dual-network debit cards must be processed through either the Mastercard or Visa networks. These are international networks which cost small retailers more to process.
“Having the option to route tap-and-go transactions through the eftpos network has the potential to save convenience stores thousands each year, but we need the banks to take notice and make this option available to these businesses.
“So we’re seeking to work with the banks to this end, and we’re encouraging stores themselves to challenge their bank to provide them this choice,” he says.
Other alternatives such as Tyro are an emerging opportunity for retailers to potentially reduce costs, Mr Rogut says.
Activism: Federal, state and local
The battleground of issues crucial to convenience stores getting a fairer go is drawn across Federal, state and local lines. The AACS is urging retailers to contact their respective members, write letters, outline their perspectives and seek meetings to limit further regulations and restrictions on certain products.
“Some states are considering lifting the age which people can buy legal tobacco from 18 to 21, yet at the same time want to continue to prevent eCigarettes – viewed internationally as a highly effective tool in helping people quit – from being legally sold. It’s a classic example of regulation gone wrong,” Mr Rogut says.
“At the same time, we have the periodic suggestions by the health lobby that soft drink taxes, sugar taxes or salt taxes are needed to improve societal health, yet convenience stores are already innovating with healthier food and beverage offerings and a more sustainable product profile.
“We have a situation where the market for packaged alcohol is dominated by the two major grocery chains, new licences are granted to other big businesses like Aldi, but convenience stores are prevented from competing in this category.
“It’s an example of the lack of action at the local council level have an anti-competitive effect more broadly.
“We need less regulation, not more, to compete more effectively with the major grocery chains, so convenience stores should take the opportunity now to ask these questions of Federal, state and local politicians until a more appropriate operating environment is achieved,” he says.
Crime
The AACS has been vocal about the inappropriate response to crimes committed against the industry in recent times, and this will continue until the judicial response to these crimes matches the stance that the community demands.
“We need tougher penalties and deterrents for the crimes committed against convenience stores and their staff to reflect their serious nature. Robberies, petrol theft and the market for black market tobacco all represent serious crimes which are not being dealt with in a satisfactorily serious way,” Mr Rogut says.
“We will continue to press our case to those politicians with the capacity to alter the landscape and make the businesses in our industry, and the people who work in them, safe,” he says.
Further information:
Jeff Rogut
Chief Executive Officer
Australasian Association of Convenience Stores
Ph: +61 467 873 789
Media enquiries:
Stephen Naylor
Wise McBaron Communication
Ph: +61 (2) 9279 4770