Woolworths wins Double Bay dispute with Harris Farm over About Life lease
Woolworths has won its legal battle with Harris Farm to prevent organic grocer About Life from transferring its lease at Kiaora Lane precinct in Sydney’s Double Bay to the latter.
The dispute started after About Life sold the store to family-owned grocer Harris Farm for $10 million in April and agreed to transfer the 77-year lease as part of the sale.
Woolworths went to the Supreme Court of NSW saying it had the first right of refusal over About Life's retail lease, while Harris Farm alleged that Woolworths was engaging in anti-competitive practices by entering into leases that gives the supermarket giant the first right of refusal.
Justice Arthur Emmett ruled in the supermarket giant’s favour that it was entitled to an order restraining About Life from transferring the lease to Harris Farm unless it first offered the lease to Woolworths, The Daily Telegraph reported.
Woolworths is now expected to make an offer to take over the site, which is still occupied by About Life.
The organic grocer has been planning to close its Double Bay outlet to focus on its flagship store at Bondi Junction.
The decision would allow Woolworths to open a smaller retail offering such as a Woolworths Food Quarter on the site when About Life vacates the premises.
According to the judgement, Woolworths’ general manager of property management Matthew Franich said the supermarket giant was “content” to see About Life lease the space because it had dropped plans to build a Thomas Dux there and because of the “symbiotic relationship” that existed between Woolworths and About Life.
“Mr Franich said that, conversely, if the subject premises were occupied by a retailer that sells many of the same products that are sold by the Woolworths supermarket, as a typical Harris Farm store would, Woolworths would lose the benefit that the co-location with About Life brings to the supermarket, without obtaining any offsetting benefit,” it said.
According to Franich, Woolworths has plans for a “smaller innovative retail offering such as a Woolworths Food Quarter”, which would predominantly provide ready-to-eat meals in a similar fashion to About Life.
It could expand the supermarket chain’s “Click & Collect” point for online shoppers and a Dan Murphy’s cellar business.
Woolworths already has a flagship supermarket at Kiaora Place.
But the judgement noted that Harris Farm had no knowledge of Woolworths’ first right of refusal and its CEO Angus Harris was assured by About Life earlier that there were no restrictions on the organic grocer selling its interest in the premises.
Justice Emmett dismissed Harris Farms’ allegations the supermarket giant had breached an “enforceable undertaking” with the Australian Competition and Consumer Commission to not enter into restrictive, anti-competitive leases.
A Woolworths spokeswoman said it welcomes the decision upholding its first right of refusal while About Life and Harris Farm did not comment.
