Irish Competition Authority Decisions

1. Notification was made by Power Supermarkets Limited 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 Feresant Ltd and Power Supermarkets Limited.

2. The notification concerns the lease of the supermarket unit at Galway Shopping Centre, Headford Road, Galway between Feresant Ltd as Landlord and Power Supermarkets Ltd as tenant.

3. Power Supermarkets Ltd trades as a supermarket. Feresant Ltd is the owner and landlord of the Galway Shopping Centre.

4. The notified lease is in draft form and is for a term of 999 years from l January, l99l. The restricted user clauses in the lease are as follows:

(a) Under Clause 3.2 (3) the tenant covenants with the landlord

"Not to keep the demised premises save for the purpose of a Supermarket and/or departmental shop or store and/or a retail shop or store and/or including the sale, making and baking of food or food products of all kinds for consumption off the premises and/or trading by way of Licensing, franchising and making concessions provided such is ancillary to the business of a Supermarket and/or for the sale of intoxicating liquor for consumption off the premises PROVIDED ALWAYS that the obligations of the Tenant under this Clause 3.2(3) shall cease and be of no further effect after lst January 2011 and PROVIDED ALWAYS that not more than l0% of the net floor area of the demised premises may be licensed or franchised or concessioned at any one time and provided further that the Landlord shall use its best endeavours insofar as it is reasonably practicable not to allow any licensee, franchisee or concessionare to be or to become a Tenant so as to acquire any rights to a Lease."

(b) Under Clause 3.2(7) the tenant covenants with the landlord:

"Not prior to 1st January 2011 to assign, transfer or underlet or part with the possession or occupation of the demised premises or any part thereof without the consent of the Landlord such consent not to be unreasonably withheld or delayed or suffer any person to occupy the demised premises or any part thereof as a Licensee (save as provided in Clause 3.2(3) but so that notwithstanding the foregoing, the Tenant may assign, underlet or transfer the whole of the demised premises without the consent of the Landlord to any holding or subsidiary company of Associated British Foods, public limited company..."

(c) Under Clause 4.3 the landlord covenants with the tenant:

"The Landlord shall not for so long as the demised premises are primarily used as a Supermarket and/or as set forth in Clause 3 (2) 3 hereof sell or permit the sale directly or indirectly by any tenants, sub-tenants or any other occupiers, users or licensees at any time of or within the Shopping Centre or any extension thereof of any foodstuffs or groceries in or from any unit or area exceeding 3,000 square feet gross lettable area."

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

5. The Authority considers that Power Supermarkets Limited and Feresant Limited 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 Feresant Limited and Power Supermarkets Limited does not offend against Section 4(1) of the Competition Act, l99l.

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 Feresant Ltd and Power Supermarkets Limited in relation to the lease of the premises at the Galway Shopping Centre, Headford Rd, Galway notified under Section 7 on 30 September 1992 (notification no. CA/590/92E), does not offend against Section 4(1) of the Competition Act, l99l.

For the Competition Authority

Des Wall

Member

13 October 1993