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EXAMINATION PAPER

Faculty of Business and Law


Trimester 2 2021 Examination

Unit Code: MMH356


Unit Name: Change Management
Exam Name: Open-book Take Home Online Exam
Anticipated writing time: TWO (2) HOURS

Special instructions for Candidates:


 This examination is OPEN BOOK.
 This examination is open for 24 HOURS. Within this period you can select when you
complete the exam.
 This examination constitutes 40% of your assessment in this unit.
 This examination comprises 6 questions. You are required to answer ALL 6 questions.
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the unit name, for example: 216123123_MM356_Change Management
 You must type your responses into a single Word document and upload the .docx to the
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 Late submissions will not be marked.
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 In the unlikely event that you cannot upload your completed exam paper, email it as an
attachment to your unit chair [andrea.howell@deakin.eu.au] within the submission time.
 The breakdown of marks in this exam is:

Question Marks Question Marks


1 5 4 5
2 5 5 10
3 5 6 10
Total Available Marks 40

All candidates MUST complete this section


Type your student ID number here: _________________________________
MMH356: CHANGE MANAGEMENT
T1 2021 EXAMINATION

Short answer questions (up to 500 words for each question); each question is
worth 5 marks
Question 1.
Three (3) strategies for implementing change are: economic, organizational development
(OD), and a combined economic/OD strategy. Identify which strategy Woolworths Group
Australia (WGA) used and in your response outline the situational variables that should
have been taken into account.
Please type your response below.

Question 2.
Hayes (2018) argues that leadership can be fragile when leadership is distributed. Using
examples from the case study, explain the breakdown of organizational and
environmental coupling in WGA.
Please type your response below.

Question 3.
1. WGA encountered significant resistance during the planning and approval process.
Explain where this resistance came from and how resistance was demonstrated.
2. Provide three (3) strategies that the CEO could have used to counter this resistance
(these were taught during the trimester).
Please type your response below.

Question 4.
WGA applied a strategic intervention in merging its drinks and hospitality businesses into
a new entity Endeavour Group (EG) to sell that subsidiary at a later date.
1. Explain your understanding of an intervention, and then what a strategic
intervention.
2. Keeping in mind the focus of a strategic intervention, briefly describe the three
separate strategic interventions evidenced within the case study.
Please type your response below.
Essay answer questions (up to 1,000 words approx. for each question); each
question is worth 10 marks
Question 5.
In responding to the Gilbert Review, WGA stated:
For some years, the Woolworths (WGA) team has aspired to live our purpose in all
that we do. Our purpose – to create better experiences together for a better
tomorrow - is connected to a great deal of our decision making and what we do
every day. The values which flow from our purpose - to do the right thing, to care
deeply and to listen and learn - guide how we work as a team within Woolworths,
and how we engage with our customers, suppliers, communities and governments.

We acknowledge and fully accept that, in proposing the Darwin Dan Murphy’s in
the way that Woolworths did, “Woolworths has not met all of the aspirations and
standards” in its purpose and values.

1. Analyse why WGA was so out of touch with its core values.
2. Strong leadership is critical to ensuring that change initiatives are successfully
implemented. Using several of the key leadership tasks outlined in Table 9.2 of
Hayes (2018), advise what you believe WGA leadership should do now and why.
Please type your response below.
Question 6.
You are advising WGA on the best way to move forward now.
Some of the findings from the Gilbert Review are outlined below:

 Commercial considerations taking precedence over public interest issues and


perceptions about, and the actual possibility of, harm arising from the store.
 Woolworths’ focus was on mitigating and managing alcohol-related harm around the
point of sale, but many community members felt that Woolworths was not listening
to them, including health experts with many years of experience in the Northern
Territory.
 The Liquor Commission’s findings on public interest and community impact should
have been sufficient to provoke a “deeper consideration” by Woolworths - this did
not happen.
 Having set a “higher bar” for itself, in its aspiration to be a values-driven corporate
citizen, Woolworths needed to engage genuinely with key interest groups, including
health experts – beyond minimum legal requirements.
 Not consulting with its Reconciliation Action Plan (RAP) Working Group and its
External Indigenous Advisory Panel as part of Woolworths’ decision-making process.
 Woolworths’ submission to the Legislation Scrutiny Committee in March 2020 may
not have been in accordance with the reputation it aspires to.
 Woolworths has further work to do to meet its RAP commitments.

Noting the above findings, formulate a change plan with specific targets and goals that
WGA can implement.
Please type your response below.

- END OF EXAMINATION -
Dan Murphy’s in Darwin: ‘a disastrous proposal’
Dr Andrea Howell and Mike Bengough

Dan Murphy’s is a highly successful liquor store with 248 outlets throughout Australia and is a fully
owned subsidiary of Woolworths Group Australia (WGA). In 2019, WGA merged its drinks and
hospitality businesses (Endeavour Drinks and the ALH Group (ALH)), to establish the Endeavour
Group Ltd (EG). The merger was a strategic initiative to enable the de-mutualisation of EG from WGA
at a future time. According to Rickard (8 June, 2021) while WGA stated the sell off was to “enhance
shareholder value through a greater focus on each business’ core customers offering and growth
opportunities”, the “real” reason was that WGA wanted to exit the poker machine business. As the
owner of 12,400 electronic gaming (poker machine) licences, Rickard suggested WGA was
increasingly off the radar for many fund managers because of its ownership of poker machines. EG
was listed on the Australian Stock Exchange (ASX) in 2021.

In its promotional material, Dan Murphy’s tells the story of its namesake (Gibson, 2021): "One man
built his reputation on a handshake. He made a promise that no matter who you were, or what
you'd like to drink, he'd have that drink at the lowest price." However, that promise appears to have
cost WGA a lot of money and a heavy hit to its reputation. A five-year battle to acquire a liquor
‘megastore’ approved in Darwin and sited near three ‘dry’ or alcohol-free areas, was abandoned in
April, 2021 following a strong and sustained backlash from Aboriginal and health groups.

Northern Territorians’ average per capita consumption of alcohol is among the highest in the world.
Rates of alcohol harm are shocking, including presentations to hospital emergency departments,
traumatic head injury, hospitalisations for acute alcohol disease, alcohol-related domestic violence
and child abuse (Thorn, 2021). Therefore, the advocacy for this ‘disastrous proposal’ by one of
Australia’s biggest corporations had the potential to put Aboriginal health and wellbeing at grave risk
(McInerney, 2021).

Initially, WGA did not bow to pressure from local groups and mounted a robust defence of the
Darwin site. It even went so far as to seek a change of legislation before accepting the decision of an
independent review panel early in 2021 (refer to the Timeline at the end of this paper). In the
aftermath, WGA CEO Brad Banducci issued an apology and conceded the organisation did not listen
to the concerns of indigenous groups, the voices of First Nation people inside of WGA, and their
advisory panel, and did not follow their Reconciliation Action plan. “It’s deeply ironic that we can sit
here and talk about our support for the Uluru Statement of the Heart 1 but that needs to be reflected
in how we run our business and the things we need to change”, said Mr Banducci (Mitchell 2021b).
“We need to get our own house in order”.

What was at stake?


For Woolworths, the $40m investment was welcomed by local business groups as an answer to
economic stagnation and greater consumer choice (Gibson, 2021). What began in 2016 with the
original application to build the liquor megastore at the proposed location, saw a five-year run of
rejections, appeals, opposition and discussion. Cumulatively, this put pressure on EG (CEO Steve
Donohue), to announce in November 2020 that it had agreed to move the site of the proposed Dan
Murphy’s Darwin store to be further away from these communities. The group said this decision had
been made after extensive consultation with community groups. Interestingly in December, 2020

1
The Uluru Statement of the Heart was developed in 2017 to enable Indigenous Australians to have a voice in
matters of law which affect them
WGA announced it had commissioned an Independent Panel Review (IPR) of the Darwin plans,
which would review health concerns, stakeholder engagement and other processes behind the
store. At the time, WGA Chairman Gordon Cairns said: “We acknowledge that there are some in the
community that feel they have not been adequately consulted regarding the proposed store. The IPR
will provide a further opportunity for them and other stakeholders with a legitimate interest in the
development to express their views” (Allen, 2021).

For local indigenous, health and community groups, issues with alcohol related problems meant
there was vehement opposition to the planned investment. The proposed megastore was within
walking distance of three dry Aboriginal communities, including Kulaluk, Minmarama and Bagot.
Olga Havnen, Chief Executive of Danila Dilba said Darwin was already “awash with takeaway liquor”
and that “we don’t need another store, especially one located so close to three dry Aboriginal
communities.” She also stated: “There’s no harm caused to the community by taking the time to
properly consider the public interest and community impact of the proposal. But there is a lot of
potential harm in a rushed process that neglects the public health impact” (Allen, 2021).

For the NT Government, it see-sawed between attempts to curb alcohol-related harm and promote
development. When elected in 2016, the government made it clear it was serious about the
territory’s alcohol problems. It reinstated the Banned Drinkers Register; appointed former Chief
Justice Trevor Riley to conduct a ‘root and branch’ review of the territory’s alcohol policies and
legislation; and accepted all but one of the 220 recommendations of Riley’s review, including
establishing an independent liquor commission. However, this began to change once the reforms
came into effect. The 400 square metre ban was repealed, the government’s opposition to WGA’s
proposal evaporated and it seemed to become less enamoured of the commission’s ‘independence’
(Thorn, 2021).

Sydney-based lawyer Danny Gilbert was scathing in his review, which found WGA and the
government worked together to find a way around the barriers to the development’s approval. They
ultimately decided to legislate their way out of the difficulties, bypassing the independent Liquor
Commission and giving the Director of Liquor Licensing the power to fast-track an approval. “Instead
of doing its own dirty work, the government had engineered a process that made the Director of
Liquor Licensing responsible for determining the application” said Thorn (2021). Community groups
expressed disappointment over the decision and accused WGA of “corporate wilful blindness”,
comparing the decision to the destruction of Juukan Gorge 2 by mining company Rio Tinto (Powell,
2020, 2021a; Knight, 2021). “I believe the decision by WGA chairman Gordon Cairns and CEO Brad
Banducci to aggressively pursue their desired outcome is a good example of corporate wilful
blindness,” said Olga Havnen.

For business investors, Dan Murphy’s withdrawal may have ongoing ramifications according to
Opposition leader Lia Finocchiar: "The Gunner government's reaction and continual shifting of the
goalposts made it very clear, even to the most casual observer, that the Northern Territory is not a
good place to do business (Gibson, 2021)”. The NT Chamber of Commerce chief executive Greg
Ireland concurred saying the “scrapped” proposal would mean the loss of new jobs and affect the
perception that the NT was a place to do business (Read & O’Mallon, 2021). However, for other
business leaders such as Australia’s richest man, Andrew Forrest, the decision to withdraw made
sense. Mr Forrest had previously criticised the company’s choice to open a “dirty big grog shop” near
the Indigenous community (Powell, 2021).

The aftermath
2
Rio Tinto developed mining projects in heritage areas by blowing up 40,000 year old caves (Knight, 2021)
Woolworths/Endeavour Group

In the upper echelons of corporate Australia, brand reputation trumps local profits (Gibson, 2021).
When opponents of the project took their fight directly to the WGA board, warning its national
reputation was at risk if it allowed its subsidiary to proceed with the controversial Darwin project,
the Board took note and commissioned an independent review. That report was highly critical of
WGA officials, Michael Gunner’s Labor government, and the actions of the territory’s Director of
Liquor Licensing Phil Timney, in approving the development in the face of the opposition from health
experts and the wishes of Darwin’s Indigenous community. WGA management agreed, apologising:

"We did not do enough in this community to live up to the best practice stakeholder
engagement to which we hold ourselves accountable," Mr Cairns, WGA Chairman said. “In
particular we did not do enough stakeholder engagement with a range of Aboriginal and
Torres Strait Islander communities and organisations."

BUT WGA CEO Brad Banducci denied the company had done anything wrong in April (Allam & Butler,
2021). “There’s nothing wrong with what we’ve done, but we can improve it, and we have high
aspirations for the way we should operate,” he said. He then sought to put some distance between
WGA and the EG; at a shareholder briefing on April 29, 2021 he did not rule out the prospect of a
Dan Murphy's outlet opening elsewhere in Darwin but stated future plans were a matter for the
WGA subsidiary which is demerging from the supermarket chain (Breen, 2021):

"What we have announced today is that we will not be proceeding on the current location,"
he said. "As to whether there's a future Dan Murphy's in Darwin that would be up to  the
Endeavour Group but certainly in any engagement process going forward we will take on
board the Gilbert Review findings and adjust how we consult on those matters."

WGA then formally surrendered its liquor licence back to the NT Government on April 29, 2021. In a
letter to the IRP Chair, Danny Gilbert, on June 9 WGA Group Chairman, Gordon Cairns, Group CEO,
Brad Banducci and Group Sustainability Chair, Holly Kramer stated:

“We clearly failed to meet our expectations and we deeply regret our insensitivity to critical
stakeholders in Darwin and beyond, and our own external Indigenous Advisory Panel, whose
advice we did not seek. For that, we unreservedly apologise. At the heart of our reflections
today is strengthening our foundations for deeper, and more thoughtful and meaningful
relationships with First Nations’ peoples. Relationships built on listening, learning and
education. Relationships underpinned by equity and respect. Without those foundations it
will not be possible for us to achieve our ambitions for full reconciliation”.

Banducci also admitted, in June 2021, that ‘The buck stops with me . . . I’ve learnt a lot’’(Mitchell,
2021a; Butler, 2021). Powell (2021) reported that WGA’s executives would not lose their bonuses
but chief executive Brad Banducci has pledged to base a portion of WGAs’ long-term executive
remuneration in the future on the company’s reputation to ensure issues such as those with the
since-axed Darwin store would not be repeated.

External stakeholders

Olga Havnen, Danila Dilba Chief Executive said it was a win for ensuring big corporations take into
consideration the social and economic impacts of their businesses:
“Those things have got to be taken into consideration. This is why we have environmental
laws. This is where we have restrictions on the sale of certain products. For example, we
don’t sell alcohol to kids – there’s a reason for that. I think these sorts of social
responsibilities need to be taken into account and considered seriously, and that it’s not
enough just to focus on the profits. Profits don’t come before people or before the
environment,” she said (McInerney, 2021).

Several external stakeholders have also called for greater corporate responsibility (McInerney,
2021). The Public Health Association of Australia (PHAA) welcomed the news that WGA had
cancelled its plans for the store saying it was good that the retail corporate had listened to the
concerns of Indigenous groups. But it also sounded a warning, saying it was “disappointing to hear
from the CEO Brad Banducci that WGA may search for a new location for the store”. “These stores
will cause serious alcohol harms wherever they are, and it’s time major retailers listened to the
expert public health advice on these issues,” the PHAA tweeted.

The Royal Australasian College of Physicians (RACP) also welcomed WGA’s decision, saying the news
“comes as a relief to specialist physicians who have been seriously concerned about the impacts of
building a liquor megastore and the harms that it would bring to the community. When we increase
the access to alcohol in the community, we see a direct increase in alcohol related harms,” said
President John Wilson. “After all the progress that’s been made in reducing alcohol related harm in
the Northern Territory, building a liquor megastore would have been a disappointing and an
unnecessary step backward. We hope that this will herald the start of a process where more socially
responsible decision making is made by commercial entities about the impacts of alcohol-related
harm in the communities they serve.”

AMSANT, Danila Dilba, Foundation for Alcohol research and Education (FARE) and NTCOSS are asking
the retail giant to release the Gilbert Review immediately, “in the interests of transparency”. “This is
an important opportunity for Woolworths and other big alcohol retailers to re-assess their
community consultation processes and acknowledge the harms their stores do to so many
communities across Australia,” they said. “Communities should not need to fight so hard for so long
ever again – this a unique opportunity for a re-set of liquor store approval processes in the NT and
indeed across the country.”
Timeline
The key dates and strategic moves by Woolworths and other stakeholders (FARE, 2021):
2016
 The NT Government amended the Liquor Regulations to make it a condition of a store licence
that the retail floor space was limited to a maximum of 400 square metres 3.
 Woolworths applied to substitute an existing licence for a Dan Murphy’s store and threatened to
take the NT Government to court.
2017

 Woolworths applied to the Federal Court of Australia to have the amendments made under The
Liquor Amendment Regulations 2016 declared invalid on the basis that they were not within the
regulation making powers of the Government.
 It later withdraws the case from Federal Court action against the NT Government
 An independent review into alcohol in the NT — the Alcohol Policies and Legislation Review (Riley
Review) established to tackle the high level of alcohol harm in the NT. The Alcohol Policies and
Legislation Review Final Report made a range of recommendations to reduce alcohol harm in the
NT.
o One of the recommendations from the Riley Review comes into effect: a five-year
moratorium on new take-away liquor licences began 27 October, 2017.
o However, the 400 square metre rule would be repealed.
2018
 The NT Government announces legislation to re-establish an NT Liquor Commission.
 Woolworths lodged an application to build a Dan Murphy’s liquor outlet on the corner of Osgood
Drive and Bagot Road, Eaton.
 Woolworths applies to NT Liquor Commission for licence; it commences its next legal action,
applying to the NT Liquor Commission to open the first Dan Murphy’s store in Darwin despite the
application being opposed by Aboriginal communities, members of the public, and organisations
including FARE, NTCOSS, Danila Dilba health service, Aboriginal Medical Services Alliance NT,
Public Health Association NT, and Amity Community Services.
2019
 The NT Liquor Commission denied the application for substitution (see 2017) on 20 September
2019, noting the “potential for a significant increase in harm due to the use of liquor, over and
above that already occurring within the community areas”.
 The Northern Territory Government overhauls the Liquor Act 1978 in response to the 2017
Alcohol Policies and Legislation Review Final Report (the Riley Review) and the NT Liquor Act
2019 comes into effect.
 Woolworths appealed the NT Liquor Commission decision to the NT Civil and Administrative
Tribunal (NTCAT).
 Woolworths faces shareholder scrutiny when asked to approve re-structure plans
 NTCAT dismisses Woolworths’ application on the grounds that it could be made in relation to
premises that existed.
2020
 Woolworths applied to the Supreme Court of the Northern Territory for leave to appeal the
Tribunal decision.
 Legislative Assembly introduced the Liquor Amendment Bill 2020 and referred it to the
Legislation Scrutiny Committee for inquiry. As a result, Woolworths withdrew from the Supreme
Court action since the legislation changed the Liquor Act 2019 to remove the barriers to the
application identified by NTCAT.
 FARE took the unprecedented step of formally writing to the Board of Woolworths asking them
to properly consider and reassess their Director responsibilities under the Corporations Act 2001.
“In light of the LC Decision, FARE’s position is that it is reasonably foreseeable that to
continue to pursue the proposed development will carry with it significant reputational risk to
Woolworths.”

3
About 1.5 times as big as a tennis court (The measure of things, 2021)
 Woolworths lodged an application to have the case reconsidered at NTCAT. However, it sought
an adjournment of public hearing to early 2021.
 Government introduces legislation to bypass independent Liquor Commission process; power
now granted to the Director of Liquor Licensing to decide on the Woolworths’ Dan Murphy’s
application without following the laws of natural justice or considering the previous decisions by
the Liquor Commission or NTCAT. Woolworths can propose an alternative location without
submitting a new application and without seeking the views of the community at the new
location. The current NTCAT proceedings would be terminated, and the Director’s decision would
not be reviewable by NTCAT. Moves by the NT Government to weaken its alcohol policy reforms
were condemned by leading NT Aboriginal, health and social groups and community members.
 Supermarket giant Woolworths faced increasing pressure from Darwin-based health and
Indigenous community groups to reconsider a controversial plan to open one of its biggest Dan
Murphy’s liquor outlets in the city. The announcement that a Dan Murphy’s outlet would relocate
to an alternate site fails to alleviate the concerns of Aboriginal community health advocates.
130,000 signatures ignite the “keep grog out of our communities” petition. NT Community
continues to speak out, refuting Gordon Cairns (Woolworths Chairperson) claims of community
consultation during Woolworths AGM. 45 organisations and community leaders signed an
impassioned open letter to Woolworths Chairperson Gordon Cairns. This letter was published as
a full-page advertisement in the Australian Financial Review (9 Dec AFR).
 The Director of Liquor Licensing officially approved Woolworths’ application despite strong
community objection.
2021
 Four high-profile business, health and Indigenous leaders appointed to an independent panel
established to review Woolworths’ plans to build a store close to dry communities in Darwin.
 Indigenous community groups in Darwin hit out against the Woolworths Group for what they say
is the company’s failure to have genuine community consultation over the construction of a Dan
Murphy’s liquor store.
 Community groups criticise Woolworths for divisive tactics during push to build Darwin liquor
store:
“It’s wedging Aboriginal groups against each other. This is the game that they’re good at, big
corporates, they love it, and we’re calling on them to cease it. Take a social conscience in all
of this and listen to the Aboriginal leadership here in the Northern Territory and withdraw
your application now.” – John Paterson, CEO AMSANT
 Call for Reconciliation Australia to pull support for Woolworths over Darwin Dan Murphy’s
 Danila Dilba launches legal action against Woolworths, NT Liquor Licensing director over Darwin
Dan Murphy’s
 Community leaders say new Dan Murphy’s store will add fuel to fire of town’s drinking problem
 On April 30, Woolworths abandoned its plan for a Dan Murphy’s in Darwin.
 Following Woolworths’ decision, the company formally surrendered its liquor licence back to the
NT Government, which was granted to them by the Director of Liquor Licensing in December
2020. This means that, for now, there is no back door open for Woolworths or any of its
subsidiaries to build a liquor store in the area.
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three dry Aboriginal communities. Accessed 6/8/2021
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in-darwin-near-three-dry-aboriginal-communities

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FARE (2021) Timeline. Accessed 5/8/2021. https://fare.org.au/darwin/

Gibson, J (30 April 2021) Woolworths has abandoned its plan for a Dan Murphy’s in Darwin. But is
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darwin-store-20191211-p53izz

Mitchell (29 Apr, 2021) Woolworths dumps plan for Dan Murphy’s store in Darwin, for now.
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murphy-s-mega-store-in-darwin-20210429-p57ndi

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Access 6/8/2021 https://www.afr.com/companies/retail/woolworths-mea-culpa-after-dan-murphy-
s-review-finds-major-failures-20210609-p57zce

Mitchell S (10 June, 2021b) Dan Murphy’s debacle shows need for Indigenous voice. Accessed
5/8/2021 https://www.afr.com/companies/retail/woolworths-dan-murphy-s-debacle-shows-need-
for-aboriginal-voice-20210609-p57zlf

Patrick, Aaron (April 20, 2020) Should Woolworths board stop a morally dubious liquor barn?
Accessed 5/8/2021. https://www.afr.com/companies/retail/should-woolworths-board-stop-a-
morally-dubious-liquor-barn-20200419-p54l5w
Powell D (18 December, 2020) ‘No different to Juukan Gorge’” controversial Darwin Dan Murphy’s
store approved. Accessed 6/8/2021 ‘No different to Juukan Gorge’: Controversial Darwin Dan
Murphy’s store approved (smh.com.au)

Powell D (29 April, 2021a) Woolworths axes Dan Murphy’s store in Darwin after review. Accessed
6/8/2021 https://www.smh.com.au/business/companies/woolworths-axes-controversial-darwin-
store-after-review-finds-failings-20210429-p57ncm.html

Powell D (9 June, 2021b) Woolworths execs won’t lose bonuses despite damning Dan Murphy’s
report. Accessed 6/8/2021 https://www.smh.com.au/business/companies/fundamentally-failed-
independent-review-slams-woolworths-over-darwin-dan-murphy-s-store-20210609-p57ze0.html

Read M and O’Mallon F (2021) NT business lobby mourns lost jobs from dropping Dan Murphy’s.
Accessed 6/8/2021 https://www.afr.com/companies/retail/nt-business-lobby-mourns-lost-jobs-
from-dropping-dan-murphy-s-20210430-p57nrz

Rickard P (8 June 2021) Woolworths and Endeavour – what you need to know and do. Accessed
12/8/2021
https://www.nabtrade.com.au/investor/insights/latestnews/news/2021/06/woolworths_and_ende
a

The Measure of Things (2021). Accessed 5/8/2021


https://www.themeasureofthings.com/results.php?comp=area&unit=m2&amt=400&sort=pr&p=1

Thorn, M (2021) NT Liquor Licensing boss should be removed after Dan Murphy debacle. Accessed
5/8/2021 https://www.themandarin.com.au/163607-nt-liquor-licensing-boss-should-be-removed-
after-dan-murphy-debacle/

Woolworths Group Limited (2021) Independent Panel Review into the proposed Dan Murphy’s
development in Darwin. Accessed 6/8/2021
https://www.woolworthsgroup.com.au/page/community-and-responsibility/corporate-
responsibility-news-updates/people/independent-panel-review-into-the-proposed-dan-murphy
%E2%80%99s-development-in-darwin

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