8 September 2021

Fears $69 million Bay Pavilions will muscle in on town's fitness trade

| Kim Treasure
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Tracey Innes and Mace Innes at Onelife Gym in Batemans Bay

Tracey and Mace Innes from Onelife Gym at Batemans Bay. Photo: Supplied.

Batemans Bay gyms and trainers fear Eurobodalla Shire Council is muscling in on their turf, with the proposed fees and charges for the new Bay Pavilions fitness centre massively undercutting private operators.

Work on the $69 million centre started in September 2020 and it’s expected to open in early 2022.

The council-owned facility will feature several indoor pools, an arts and cultural centre, an auditorium with seating for up to 350 people, a gallery and exhibition space, arts workshop spaces, meeting rooms and a fitness centre.

Seven individual fitness providers have joined forces to lodge a submission to council as part of the public consultation process running until 4:00 pm on 22 September, 2021.

Between them, the operators employ 28 casual, part-time and full-time staff and claim the fees being proposed by council for the new facility would send a private business broke in less than 12 months.

They claim the proposed pricing structure will undercut the area’s existing gym businesses by at least 40 per cent.

Tracey Innes has owned and run Batemans Bay’s Onelife Gym for the past 12 years and says council’s plans are a recipe for disaster.

She has urged council to look at the current number of fitness businesses in the Batemans Bay market and recognise that in the recent past whenever a third centre opens one closes.

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“This is not a made-up statistic of somewhere else – this is what has happened in Batemans Bay during the past 12 years when I have owned the business,” says Tracey.

“We have had an explosion of new studios open in our area which is wonderful, particularly in the mindfulness/wellness area of fitness. But [council’s] business model has singled them out as well with a casual price of $12 for yoga, once again cutting off these small boutique businesses at the knees.

“We have been a gym in our current premises for more than 35 years and feel we are a very good reflection on what price you need to have to maintain a business and employ people for longevity.”

Tracey is imploring councillors to stand up for local businesses during a difficult time.

“If your basis for opening a gym was to really offset costs, well then it does not make sense,” she says. “This business should at least cover its costs if not make a profit.

“Were you to charge your stated pricing in a private commercial facility you would not make a year of trade before you went bankrupt based on our population and usage of such a facility in our area.”

The fitness operators have drawn council’s attention to Section 45 of the Competition and Consumer Act 2010, “which prohibits contracts being entered into by a corporation that has the purpose, effect or likely effect of substantially lessening competition in a market, even if that conduct does not meet the stricter definitions of other anti-competitive conduct”.

The operators wrote: “We are particularly concerned as the indicated pricing structure will undercut all existing locally owned fitness business from 40 per cent upwards within the Eurobodalla area.

“These businesses are independently owned and need to make a profit in order to operate.

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“It is our respectful submission that if the proposed contract for the fitness centre is to be entered into with a company, that contract would be in breach of Section 45 and would not be in the interests of the community given council funding will no doubt be required to subsidise the gym facility.

“During our meeting with ESC [Eurobodalla Shire Council] officers and [General Manager] Catherine Dale 12 months ago, we were informed the fitness centre was an essential and integral part of the Bay Pavilions to offset the huge costs the aquatic centre was going to generate.”

In response, a Eurobodalla Shire Council spokesperson said Aligned Leisure had been awarded the contract for the Bay Pavilions as one facility, with specific service areas within.

“The cost of running the facility will include management and general customer service as well as specialist staff all operating as one business unit, not separate businesses,” said the spokesperson.

“The Bay Pavilions will provide an additional health and fitness offering in the shire, with gym, health and fitness programs and aquatic services in one facility, further adding to the gym offerings in the region. No price discussions were held with any service providers in the area as part of the development of council’s draft fees and charges for the Bay Pavilions.

“Council engaged Otium Consulting, an industry specialist, to develop the business case and initial draft fees and charges, which have been reviewed and revised regularly during the project development.

“In addition, prior to going out to tender for the operation of the facility, council reviewed a range of facilities to consider the current range of services, programs and prices in the market. These included leisure centres (Ulladulla, Kiama, Chermside and Ballina), theatres and galleries (Orange, Griffith and Shoalhaven), and local and regional gyms.

“Council resolved on 24 August, 2021, to publicly exhibit the draft fees and charges for the Bay Pavilions. There are more than 80 proposed fees, including full price and concessional rates in each service category, with more than 20 separate fees that relate to gym, health and fitness.”

To make a submission, click here.

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Billy Armstrong8:46 pm 17 Aug 22

Ever heard of competition in a free market? Greedy whinger. This will cost ratepayers a fortune.

Paul Bradstreet8:15 pm 08 Sep 21

Had Council staff spoken to current gym owners earlier they would have learnt that their intentions are potentially illegal.
Now that Clr Brown has announced at the last council meeting that it is not council’s intention to be price competitive the gym owners should take advice as to whether this offer of “orderly marketing” gives them grounds for action for attempted tacit price collusion.

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