The National Retail Association (NRA) has pulled out of talks of a proposed merger with the Australian Retailers Association (ARA) over concerns about the impact on small and medium-sized businesses.
The NRA said on Tuesday, after nine months of negotiation, that it feared these retailers “would be lost in the new organisation” if the two associations merged.
The NRA Board said it must prioritise the interests of its members.
“The NRA Board ultimately decided that it could not support a proposal to give major retailers guaranteed positions on the board of a new organisation,” NRA chairman Mark Brodie said in a statement.
“Although the NRA already has a number of large retailers among its membership, we have always taken the position that all members are equal. We believed the proposed structure would disadvantage our existing members, and ultimately the NRA Board had to make its decision in the best interests of those people we represent.”
He added that the retail group is also concerned about the financial viability of the proposed entity, as a large increase in executive salaries was to be underwritten by contributions from large known retailers.
“We were concerned that this was not a sound footing for a viable, long-term industry association. As a result, we have informed the ARA and the working group that we cannot proceed on this basis. However, the Board remains supportive of a pure merger between our two organisations and is of the view that is should continue to be a long-term goal,” added Brodie.
Despite the cancellation of the proposed merger, NRA will continue to work with ARA on dealing with issues in the retail sector, such as the Modern Award Reviews, tax reform and campaigns.
“We wish the ARA and its members well. The NRA will now redouble our efforts to meet the needs of our members and ensure their voices are heard among decision makers and the wider public,” said Brodie.
The negotiation involved NRA and ARA Board members and major retailers such as Chemist Warehouse founder Jack Gance, Woolworths’ head of government Christian Bennett and JB Hi-Fi CEO Richard Murray.
Russell Zimmerman, executive director of ARA told Inside Retail that the news came as quite a surprise.
“The ARA was fully supportive of the merger. I’m somewhat surprised at this result, having not been given any prior warning.”