Vallbury/Cassidys  IECA 318 (21st April, 1994)
No.CA/25/93 - Vallbury Limited/Cassidys Family Pharmacies Limited.
was made by Cassidys Family Pharmacies Limited on 22 June, 1993 with a request
for a certificate under Section 4(4) of the Competition Act, 1991 or, in the
event of a refusal by the Competition Authority to issue a certificate, a
licence under Section 4(2), in respect of a sale agreement between Vallbury Ltd
and Cassidys Family Pharmacies Ltd.
subject of the notification
notification concerns the agreement for the sale of a shop unit at 31 Cruises
Street, Limerick between Vallbury Ltd as vendor and Cassidys Family Pharmacies
Ltd as purchaser.
Ltd was engaged in the development of shop units at Cruises Street. Cassidys
Family Pharmacies Ltd is engaged in the business of retail pharmacy.
notified sale agreement was executed on 24 May 1993. The restricted user clause
in the agreement - clause 13 - is as follows:
contracts which Vallbury enters into on or after the date hereof for the first
sale or first leasing of any of the Units listed in sub-paragraph (ii) hereof
shall contain a condition prohibiting the Purchaser or Lessee (as appropriate)
from using such Unit as a dispensing pharmacy for the sale of drugs/medicines
for which prescriptions are required for a period of 2 years from the 1st
October 1992 or until such time as the property described in the particulars
hereto ceases to be used primarily as a dispensing pharmacy (which ever shall
be the earlier) .
units to which sub-paragraph (i) hereof shall apply are units 3, 5, 6a, 7a, and
32b Cruises Street."
agreement also includes a number of provisions and conditions relating to the
- The Applicability of Section 4(1)
Authority considers that Vallbury Ltd and Cassidys Family Pharmacies Ltd are
undertakings and that the notified agreement is an agreement between
has effect within the State.
sale agreement contains a number of standard sales conditions which do not
raise issues under the Competition Act. In addition the agreement includes an
exclusive user clause insofar as the landlord/vendor of the shop units at
Cruises Street covenants not to allow 5 other specified units in the
development to be used as a dispensing pharmacy for, at maximum, a period of 2
years from 1 October,1992. In its Notice in respect of Shopping Centre Leases,
which was published in Iris Oifigiuil on 10 September 1993 (pp.665-667), the
Authority expressed its conclusion that such restricted user clauses in
shopping centre leases do not generally offend against Section 4(1) of the
Competition Act, 1991 for the reasons stated in that notice. The Authority
would also take the view that the inclusion of restricted user covenants in
agreements for the sale or transfer of landlord or lessee interests in shopping
centre leases similarly would not have the object or effect of preventing,
restricting or distorting competition in any part of the State. The Authority
therefore considers that the notified agreement between Vallbury Limited and
Cassidys Family Pharmacies Limited does not offend against Section 4(1) of the
Competition Authority has issued the following certificate:
Competition Authority certifies that in its opinion, on the basis of the facts
in its possession, the agreement between Vallbury Limited and Cassidys Family
Pharmacies Limited in relation to the sale of unit 31, Cruises Street, Limerick
notified on 22 June, 1993 (notification no.CA/25/93), does not offend against
Section 4(1) of the Competition Act,1991.