Irish Competition Authority Decisions

1. Notification was made by Glenberg on 30 September, l992 with a request for a certificate under Section 4(4) of the Competition Act, l99l 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 Westport Developments Limited and Glenberg.

2. The notification concerns the lease of unit No 5 at Headford Road Shopping Centre, Galway between Westport Developments Ltd as Lessor and Glenberg as lessee.

3. Glenberg is the property holding company for its subsidiary, Peter Mark which trades as a hairdresser with approximately 48 outlets in the State including the salon at the Headfort Rd shopping centre. Westport Developments Ltd is the owner and landlord of the shopping centre.

4. Glenberg has advised that the sub-lease applicable to Unit 5 has a term of 999 years from l November, l985. The relevant sub lease was not furnished but Glenberg indicated that the covenants therein are similar to those in the Head lease, which covered units 1 to 7 and an ATM site, save in relation to rent, user and exclusivity. The restricted user clauses in the Head lease are as follows:

(a) Under Section III, clause 3(o) the tenant covenants with the landlord

"To use the demised premises for retail shop outlets and ancillary purposes connected therewith but for no other purpose .... PROVIDED HOWEVER that nothing herein shall prohibit user of any part of the demised premises for the business of Hairdressing Salon, Banking Hall, Building Society or Insurance Company Office and the installation of one Banking A.T.M. machine."

(b) Under Section III, clause 3(q)(1) the tenant covenants with the landlord

"Not to assign or underlet the whole of the demised premises except with the previous consent in writing of the Lessor (such consent not to be unreasonably withheld in the case of a responsible and respectable Tenant).

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

5. Glenberg has advised that "Glenberg/Peter Mark can only use the premises for the purpose of a Hairdressing Salon. Glenberg believes that by virtue of the fact that this is a long Sub-Lease that they have exclusivity within the Centre to use their Unit for the business of hairdressing."

6. The Authority considers that Glenberg and Westport Developments Limited are undertakings and that the notified sub-lease is an agreement between undertakings. The agreement has effect within the State.

7. 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 Westport Developments Limited and Glenberg does not offend against Section 4(1) of the Competition Act, l99l.

8. 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 Westport Developments Limited and Glenberg in relation to the lease of the premises at Headford Road Shopping Centre, Galway notified under Section 7 on 30 September 1992 (notification no. CA/999/92E), does not offend against Section 4(1) of the Competition Act, l99l.

For the Competition Authority

Des Wall

Member

13 October 1993