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 L&C Properties Ltd and Power Supermarkets Limited.

2. The notification concerns a lease relating to the supermarket unit, level 2 at The Square Towncentre, Tallaght, Dublin 24 between L & C Properties Ltd as landlord and Power Supermarkets Limited as tenant.

3. L & C Properties Ltd is the landlord of shop units in The Square Towncentre, Tallaght, Dublin 24. Power Supermarkets Ltd trades as a supermarket with outlets throughout the State.

4. The notified lease which is in draft form is for a term of 9,990 years. The restricted user clauses in the leases are as follows:

(a) Under clause 3.2(3) the tenant covenants with the landlord "Not, without the prior consent in writing of the Landlord or its Agent thereunto lawfully authorised, to use or to permit or suffer or allow the Demised Premises or any part thereof, to be used for any purpose other than a Supermarket and/or Departmental Shop or Store and/or Retail Shop or Store and/or including the sale, making and baking of food or food products of all kinds and/or trading by way of licensing, franchising and making concessions and/or for the sale of liquor for Off-Licence purposes only... PROVIDED ALWAYS AND IT IS HEREBY AGREED AND DECLARED that upon any application by the Tenant or any Undertenant of the Tenant for liberty to alter or change the aforesaid permitted use of the Demised Premises the Landlord shall not unreasonably withhold its consent..."

(b) Under clause 3.2(5) the tenant covenants with the landlord "Not during the first 35 years of the term hereby granted to assign, transfer, underlet, or part with the possession or occupation of the Demised Premises or any part thereof except with the previous consent in writing of the Landlord...But So That Notwithstanding the foregoing the Landlord shall not unreasonably withhold or delay its consent..."

(c) Under clause 4.2.5 the Landlord covenants "Not to suffer or permit any, and to ensure and procure that there are no food retailers in units 210 to 214 and unit 224 level 2 in the Centre ......"

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

5. The Authority considers that Power Supermarkets Ltd and L & C Properties 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 he 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, l993 in respect of shopping centre leases (Iris Oifigiuil of l0 September, l993, pp. 665-667). In fact, in this case, the arrangements provide for the location of competing outlets in the centre so no question of a restriction on competition arises. The Authority therefore considers that the notified agreement between L & C Properties Ltd and Power Supermarkets Ltd 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 L & C Properties Ltd and Power Supermarket Ltd in relation to the lease of the premises at The Square Towncentre, Tallaght, Dublin 24, notified under Section 7 on 30 September, l992 (notification no. CA/597/92E), does not offend against Section 4(1) of the Competition Act, l99l.

For the Competition Authority

Des Wall

Member

3 December 1993