MMA makes revised offer to wholesalers and commences legal proceedings to determine the current status of tenant agreements and confirm the enforceability of leases
The Melbourne Market Authority (MMA) has offered new leases for store tenants at the Melbourne Wholesale Fruit and Vegetable Market, the latest development in a long-running negotiation between the market operator and its tenants.
The MMA said the revised rent valuation and lease renewal notices follow extensive negotiation and Valuer-General Victoria recommendations and consideration of the independent submission made on behalf of the affected tenants by Fresh State.
The proposed leases contain a base rent adjustment of +23-38 per cent over the nine-year term of the lease, depending on store location and size.
Peter Tuohey, chairman of the MMA, said the revised valuation marks the conclusion of the conciliation and delivers clarity and fairness for all parties.
“The MMA has worked hard to reach this point, engaging in extensive discussions and conciliation over many months, and we are pleased with the outcome, which brings closure to a complex issue and a final rent position below the previously determined market valuation,” said Tuohey.
Jason Cooper, cheif executive of Melbourne wholesaler member organisation Fresh State, said the new deal included a CPI Clause which Fresh State opposed.
“A recent independent valuation, commissioned by Fresh State and presented to the Victorian Valuer-General, found these proposed increases were well above current market rents. As a result, a new in-principle rent decrease was adopted by the MMA,” said Cooper.
“However, the MMA is now seeking to introduce a CPI clause, which cannot go lower than 2.5 per cent, but can potentially rise to 4 or 5 per cent, effectively pushing rental increases back toward the originally proposed 7 per cent. With this Clause in place, the new rent deal takes us back to where we started and is essentially a backdoor tax on fruit and veg for consumers. Fresh State is calling on the MMA to remove this ratchet clause.”
The MMA said in a release the revised rent reflects current market valuations assessed by the Valuer-General and is tailored to individual store size and location. Premises have been valued at approximately $35,600 to $121,600 (excluding GST) per annum, with adjustments to reach that figure distributed evenly across the lease term to support affordability and long-term tenancy stability. As part of the standing lease offer, additional concessions include a reduced security bond and embedded electricity savings.
The MMA has also waived any requirement for back payment of increased rent between 31 August 2024 and 24 February 2025.
On 15 April 2025, the MMA issued formal letters to affected tenants, presenting a new lease offer based on the revised valuation. Accompanying this offer is a Notice to Quit, giving tenants an option to sign the new lease agreement or vacate the premises within 30 days.
Out of the 17 store businesses that reached the end of their nine-year lease term and were subject to a market rent review, MMA said five had already signed new lease agreements and agreements will be updated to reflect the revised valuation.
The MMA said the revised valuation will serve as a precedent for the broader tenant cohort, with approximately 100 lease agreements set for review in August 2025.
To ensure full legal certainty for all parties, the MMA said it will commence legal proceedings in the Supreme Court to determine the current status of tenant agreements and confirm the enforceability of leases. It said this step has been taken in the interest of transparency and fairness and will provide a strong foundation for the market’s future operations.
“We have acted in good faith throughout this process, offering multiple extensions and genuine collaboration with Fresh State to find a balanced outcome. We now look forward to tenants choosing the best path for their business with the stability and certainty that this final step provides,” said Tuohey.
Cooper said cost increases would so prices rise for consumers.
”The MMA continues to take steps to de-stabilise the market rather than foster unity, to put profit before people, and to risk an essential service such as the supply of fresh fruit and vegetables to consumers,” Cooper said.
“If the MMA decides to ignore our call, we have no other alternative but to mobilise our supply chain participants and consumer reach to Campaign against the Labor government in the context of a Federal Election that is centred around cost of living.”
