Fleurieu Regional Aquatic Centre cited for breaching ‘competitive neutrality’ rules

The Fleurieu Regional Aquatic Centre Authority in South Australia has been cited by the South Australian Competition Commissioner for breaching 'competitive neutrality' regulations.

A report released by the Competition Commissioner last week found that the Authority should introduce policies to avoid further infringement of 'competitive neutrality' relating to a complaint initially made by local gym operators in 2017.

The complaint, lodged by local fitness operators Graham Mowatt of SPA Health Clubs and Bruce Konings of FIT Goolwa, related to the provision of membership packages offered by the Fleurieu Regional Aquatic Centre (FRAC) that bundle gym services with pool access.

Competitive Neutrality Policy requires local government entities to apply the principles of ‘competitive neutrality’ to their business activities, ensuring they compete fairly in the market.

As reported by the Victor Harbor Times, it was alleged that bundled centre memberships were being offered at prices below that for which local gym operators could provide gym-only facilities.

The Commissioner's report made recommendations including that the Fleurieu Regional Aquatic Centre Authority (FRACA) introduce "separate gym-only, recreational pool only and bundled gym services/recreational pool access products".

It was also told to introduce a "cost-reflective price that accurately reflects the private sector-equivalent cost of providing a gym-only service".

Speaking at Victor Harbor's February Council meeting during a deputation, Mowatt said the FRACA's practices had cost his business an estimated $50,000 a year and caused "pain and suffering" to himself, Konings and their workers.

Mowatt advised "we have lost about $50,000 a year. We have had to slash our staff and reduce our prices to unsustainable levels.

"We were caught on the hop because we had been told initially there was going to be no gym at the centre.

"Now what I am asking, is for this council to act on this report and to do the right thing?"

As a joint partnership between the City of Victor Harbor and Alexandrina Councils, the FRACA is governed by a Board comprising independent members and council representatives.

Outgoing Chair Matt Grant said FRACA accepted the Competition Commissioner's findings, stating "the board respects the opinions of the Competition Commissioners findings in the final report and where necessary the board will address the recommendations and implement."

Grant who is stepping down to take on a role with Alexandrina Council said the future of the facility was bright.

The Victor Harbor Times quoted him as saying “the Centre is going from strength to strength in usage. It currently averages 20,000 direct paid visits per month and current memberships exceeded 1,300 in January.

"There are 500 children currently enrolled in the swim school program weekly, demonstrating the local community demand and choosing healthy recreation options."

Concerns have also been raised among elected members concerning FRACA's 2019/20 First Quarter Budget Review.

The review detailed an Operating Deficit of $643,560 and estimated cash at end of reporting period of $917,016.

Image courtesy of Fleurieu Regional Aquatic Centre.