The ACT government's recently scrapped supermarket competition policy had failed, says the representative of Canberra's IGA stores.
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Minister for Economic Development Andrew Barr on Tuesday announced the controversial policy had been dumped, claiming it had brought increased competition in the sector in Canberra.
Mr Barr wrote to federal Assistant Treasurer David Bradbury on Wednesday informing him that the ACT government would be taking a ''less interventionist'' approach to supermarket competition in Canberra, leaving the regulation of the local sector largely to the Australian Competition and Consumer Commission.
The policy had aimed, through planning laws and direct sale of land to operators, to break the stranglehold of Coles and Woolworths over the Canberra grocery market.
Terry Karkazis, ACT representative for IGA stores and owner of a supermarket at Nicholls, said the policy had not succeeded in delivering Canberrans more supermarket choice in local and group centres.
''Unfortunately it just didn't play out that way, as evidenced by Bonner and Dunlop and also potentially Girralang,'' he said.
The small business owner said there would be no ''silver bullet'' for keeping independently owned supermarkets in the capital, but without intervention smaller operators were in danger of being overrun by the retail giants.
''If the dominant players in the market like Coles and Woolworths are allowed to run free in all the centres, it could potentially mean the loss of a lot of local stores in the future, and therefore impact the choices and the competition for the consumers,'' he said.
The ACCC is reviewing Woolworths' proposed acquisition of the Supa IGA at Hawker, with a decision expected in two weeks. A spokesman said none of the commissioners was available for comment.
Mr Karkazis said the government's recent draft variation to limit the gross floor area of supermarkets in local centres to 1500 square metres, of which no more than 1000 square metres may be the ''net selling area'', could limit the expansion of locally owned stores.
''It could impact the ability of strong independents to grow and become bigger competitors, but it could also on the other side limit the opportunities for the chains to get into local centres,'' he said.
Mr Barr said in the letter the government would work with the ACCC to deliver more competitive grocery retailing to Canberrans and would maintain its right to directly sell land to supermarket operators.
