Irish Competition Authority Decisions

1. Notification was made by Abbey Life Assurance (Ireland) Limited 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 Abbey Life Assurance (Ireland) limited and Power Supermarkets Ltd.

2. The notification concerns the lease for shop units 19/20 at Merrion Shopping Centre, Merrion Rd, Dublin 4 between Abbey Life Assurance (Ireland) Limited as lessor and Power Supermarkets Ltd as lessee.

3. Abbey Life Assurance (Ireland) Limited is engaged in the business of assurance and investment management and is landlord of shop units in the Merrion Centre. Power Supermarkets Ltd is engaged in the business of supermarket with outlets throughout the country and also trades as "Notions" at unit 19/20 in the Merrion Centre.

4. The shopping centre lease notified is in draft form and contains the following restricted user clauses viz.

(a) Under Clause 4.18 the lessee covenants "Throughout the Term to use the Demise Unit for the Permitted User and for such other purposes as the the Lessor and the Management Company shall approve of in writing,........ PROVIDED ALWAYS that with the previous consent of the Lessor and the Management Company (not to be unreasonably withheld) the Demised Unit may be used for some other retail trade or business .......B UT IT IS HEREBY DECLARED that the Lessor and the Management Company shall be entitled at their sole discretion to withhold any such consent required as aforesaid if they consider that (a) the alternative user will compete excessively with any trade or business being carried on, upon or in any other portion of the Merrion Centre ......

b) Under clause 4.40 the lessee covenants " Not without the prior written consent of the Lessor (such consent not to be unreasonably witheld) to assign, transfer, underlet, mortgage, charge or part with the possession or occupation of the Demised Unit or any part theref as a licencee BUT SO THAT NOTWITHSTANDING the foregoing the Lessor shall not unreasonably withold its consent......

(c) Under Clause 4.41 the Lessee further covenants

".1 With the Lessor and with the Management Company, not to use or permit to be used the Demised Unit or any part thereof for the sale of food or food products

.2 With the Lessor and with the Management Company, not to assign or grant a lease or tenancy for any term of the Demised Unit or any part thereof unless the assignee or lessee........shall covenant with the Owner not to grant any sub-lease of the Demised Unit or any part thereof or permit the Demised Unit or part thereof to be used for the purpose of the sale of food or food products.........."

(d) The Applicants gave details of the Permitted User as household goods, furnishings and gifts. Also by way of side letter the lessee was entitled to sell records, tapes, videos and books until such time as this right is withdrawn by the Lessor on 3 months written notice to the company.

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

5. The Authority considers that Abbey Life Assurance (Ireland) Limited and Power Supermarkets 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 Abbey Life Assurance (Ireland) Limited and Power Supermarkets 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 Abbey Life Assurance (Ireland) Limited and Power Supermarkets Ltd in relation to the lease of premises at Merrion Shopping Centre, Merrion Rd., Dublin 4 notified under Section 7 on 30 September 1992 (notification no. CA/742/92E), does not offend against Section 4 (1) of the Competition Act, 1991.

For the Competition Authority.

Des Wall

Member

3 December 1993