Irish Competition Authority Decisions

1. Notification was made by Pesenta 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 standard lease between Pesenta and Power Supermarkets Limited and tenants at Merrion Shopping Centre.

2. The notification concerns the standard lease for shop units in Merrion Shopping Centre, Merrion Road, Dublin 4, between Pesenta as Lessor and its tenants.

3. Pesenta is landlord of units in Merrion Shopping Centre. Power Supermarkets Ltd is engaged in the business of supermarket with outlets throughout the State. The tenants are engaged in various retail and service activities at the centre.

4. The notified standard shopping centre lease which relates to units 7 to 14 and 23 to 28 is in draft form and contains the following restricted user clauses viz.

(a) Under Clause 3.18 the lessee covenants "Throughout the said term to use the Demised Unit for the trade or business of the sale and for such other purpose as the Lessor and the Management Company shall approve of in writing subject to the other terms hereof but not further or otherwise PROVIDED ALWAYS that with the previous consent in writing of the Lessor and the Management Company (not to be unreasonably witheld) the Demised Unit may be used for some other retail trade or business of a quiet inoffensive character (hereinafter referred to in this sub-clause as "the alternative user") BUT 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 or upon any other portion of the Office Block at the time of such application for consent or ......"

(b) Under Clause 3.40 the Lessee covenants "Not to assign, transfer, underlet, or part with the possession or occupation of the Demised Unit or any part thereof or suffer any person to occupy the Demised Unit or any part thereof as a licensee ........"

(c) Under Clause 3.42 "The Lessee hereby covenants with the Lessor and 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"

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

5. The Authority considers that Pesenta, Power Supermarkets Ltd and the tenants 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 Pesenta, Power Suoermarkets Ltd and the tenants 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 standard agreement between Pesenta, Power Supermarkets Ltd and its tenants 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/885/92E), does not offend against Section 4 (1) of the Competition Act, 1991.

For the Competition Authority.

Des Wall

Member

3 December 1993