Irish Competition Authority Decisions

1. Notification was made by D. Horkan Ltd on 30 September 1992 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 lease between Power Supermarkets Ltd and D.Horkan Ltd.

2. The notification concerns the lease of Unit 4 at Hartstown Neighbourhood Shopping Centre, Hartstown, Clonsilla, Co. Dublin between Power Supermarkets Ltd as Landlord and Hartstown Newsagents Ltd as tenant.

3. Power Supermarkets Ltd is engaged in the business of a supermarket and the letting of units at shopping centres. Its successor in title, Wanze Properties Ltd, is also engaged in the letting of shop units. D. Horkan Ltd is engaged in the business of newsagents at several locations in County Dublin.

4. The notified shopping centre lease was executed on 4 February 1986 for a term of 10,000 years from 1 October 1983. The restricted user clauses in the lease are as follows:-

(a) Under clause 4.26.1 the tenant covenants

"Not without the prior consent in writing of the Landlord ..... to use or to permit or suffer or allow the Demised Unit or any part or parts thereof to be used for any purpose other than as set forth in Part II of the First Schedule hereto and for no other purpose or purposes whatsoever...."

Part II of the First Schedule reads under the heading "Permitted User"-

"As a shop to be used as a Newsagency/Confectionery/ Tobacconist and other than for food retailing (except a small amount of convenience groceries in an area not exceeding 10% of the net selling area) and other than as an Off Licence Premises AND IT IS HEREBY AGREED AND DECLARED that the Landlord shall be entitled in its absolute discretion to refuse its consent to any proposed change of user if the alternative user will be the same as or in competition with any part of the trade or business for the time being carried on upon any other portions of the Centre whether being carried on by the Landlord or otherwise......"."

(b) Under clause 4.25.1 the tenant covenants

" Not to assign transfer or underlet or part with the possession or occupation of the Demised unit or any thereof..... BUT SO THAT NOTWITHSTANDING the foregoing the landlord ....shall not unreasonably withhold its consent......"

(c) Under clause 4.36 the tenant covenants

"Not without the prior consent in writing of the Landlord to assign lease or let or permit to be granted conveyed assigned......any one or more units ....as retail shopping outlets containing or totalling more than 2000 square feet to any person...."

In addition, there are a number of other standard restrictive covenants and obligations in the lease.

5. The Authority considers that Power Supermarkets Ltd and D. Horkan Ltd are undertakings and that the notified lease is an agreement between undertakings. The agreement has effect within the State.

6. The Authority considers that the notified agreement, and its restricted and exclusive user clauses and the other standard restrictive clauses and obligations, does not have the object or effect of preventing, restricting or distorting competition in trade in any goods or services in the State or in any part of the State, for the reasons given in the Notice of the Authority of 2 September 1993 in respect of shopping centre leases (Iris Oifigiuil 10 September 1993 pp.665-667). The Authority therefore considers that the notified agreement between Power Supermarkets Ltd and D. Horkan Ltd does not offend against Section 4 (1) of the Competition Act 1991.

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 Power Supermarkets Ltd and D. Horkan Ltd in relation to the lease of Unit 4 at Hartstown Neighbourhood Shopping Centre, Hartstown, Clonsilla, Co. Dublin notified under Section 7 on 30 September 1992 (notification no. CA/818/92E), does not offend against Section 4 (1) of the Competition Act, 1991.

For the Competition Authority

Des Wall

Member

13 October 1993