Irish Competition Authority Decisions

1. Notification was made by Aviette 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 Aviette Trust Company Ltd, Aviette Ltd and Musgraves Ltd.

2. The notification concerns the lease relating to the supermarket unit at Tallaght Shopping Centre, Main Street, Tallaght, Dublin 24 between Aviette Trust Limited as landlord, Aviette Limited and Musgrave Ltd. as tenant.

3. Aviette Trust Ltd is the landlord and with Aviette Ltd is the owner of the Tallaght Shopping Centre, Main Street, Tallaght, Dublin 24. Musgrave Ltd is engaged in the grocery business with outlets throughout the State.

4. The shopping centre lease notified in draft form is for a term of 150 years. The restricted user clauses in the lease are as follows:

(a) Under clause 3.2(2) the tenant covenants "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 as a general supermarket and ancillary goods or services or other retail trades or businesses which do not require planning permission for change of use .........P ROVIDED ALWAYS AND IT IS HEREBY AGREED AND DECLARED that upon any application by the Tenant or any under-tenant 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) By way of side letter issued in December 1991 the landlord granted exclusive user to the tenant on the following terms viz."...we confirm that you shall have the exclusive right from the date hereof to use the entire of the Demised Premises a General Supermarket and we hereby undertake not to let or sell any other unit in the Centre for a period of 21 years which would entitle the occupant to use same for the business of a General Supermarket or unit for the sale of Liquor, Wines or Spirits off the premises subject to the proviso herein contained and we will not permit any Tenant occupying any unit in the Centre or any Assignee of the Tenant within the Centre to use any unit or part thereof for such purposes and shall refuse our consent to any application to change such user upon an assignment... Provided Further That this right of exclusivity shall only apply in so far as the Demised Premises are used as a General Supermarket as contained in Clause 3.2(2) of the lease and so long as you are the Tenant of the Demised Premises.

For the purposes of clarity it is to be clearly understood that the right granted to you does not prohibit the right or entitlement of the Landlord to grant the user and or consent to the change of an existing user in respect of items or goods sold by a General Supermarket and/or Off Licence and that the right granted above relates to the overall user of a General Supermarket."

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

5. The Authority considers that Aviette Trust Company Ltd., Aviette Ltd and Musgrave 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, l993 in respect of shopping centre leases (Iris Oifigiuil of 10 September, l993, pp. 665-667). The Authority therefore considers that the notified agreement between Aviette Trust Company Ltd., Aviette Ltd and their tenants 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 Aviette Trust Company Ltd, Aviette Ltd and their tenants in relation to the lease of the premises at Tallaght Shopping Centre, Tallaght, Dublin 24, notified under Section 7 on 30 September, l992 (notification no. CA/873/92), does not offend against Section 4(1) of the Competition Act, l99l.

For the Competition Authority

Des Wall

Member

3 December 1993