Notification No.CA/25/93 ‑ Vallbury Limited/Cassidys Family Pharmacies Limited.

Decision No.318

Introduction

1.	Notification 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.

The Facts

(a)	The subject of the notification

2.	The 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.

(b)	The parties involved

3.	Vallbury Ltd was engaged in the development of shop units at Cruises Street.  Cassidys Family Pharmacies Ltd is engaged in the business of retail pharmacy.

(c)	The notified arrangements

4.	The notified sale agreement was executed on 24 May 1993. The restricted user clause in the agreement ‑ clause 13 ‑ is as follows:

"(i)	All 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) .

(ii)	The units to which sub‑paragraph (i) hereof shall apply are units 3, 5, 6a, 7a, and 32b Cruises Street."

The agreement also includes a number of provisions and conditions relating to the sale transaction. 

Assessment ‑ The Applicability of Section 4(1)

5.	The Authority considers that Vallbury Ltd and Cassidys Family Pharmacies Ltd are undertakings and that the notified agreement is an agreement between undertakings. The 

agreement has effect within the State.

6.	The 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 Act,1991.

The Certificate

7.	The Competition Authority has issued the following certificate:

The 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.

For The Competition Authority

Des Wall
Member
21 April 1994.