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 leases between Power Supermarkets Limited and the tenants of Ennis Shopping Centre.

2. The notification concerns the leases relating to shop units at Ennis Shopping Centre, Francis St, Ennis, Co. Clare between Power Supermarkets Limited as Landlord and the tenants.

3. Power Supermarkets Limited trades as a supermarket with outlets throughout the State. The tenants are engaged in various trading and service activities at the shopping centre.

4. The standard lease notified relates to unit 1 and was executed on 2 November 1988 for a term of 20 years. The restricted user clauses in the lease are as follows:

(a) Under clause 4(24) the tenant covenants "Not to assign charge underlet part with or share the possession or permit the occupation by a licensee or concessionaire or give a franchise in respect of a part only of the demised unit in any circumstances other than as hereinafter specifically permitted without the consent in writing of the Landlord such consent not to be unreasonably withheld."

(b) Under clause 4(25) the tenant covenants "Not to assign or underlet the whole of the demised unit except with the previous consent in writing of the Landlord..."

(c) Under clause 4(27) the tenant covenants "Throughout the said term to keep open and use and occupy the demised unit as specified in the Third Schedule hereto provided that with the previous written consent of the Landlord (not to be unreasonably withheld) the demised unit may be used for some other retail trade or business of a quiet and inoffensive character (hereafter referred to in this sub-clause as "The alternative user") BUT IT IS HEREBY DECLARED that the Landlord shall be entitled at its absolute discretion to withhold any such consent required as aforesaid if the alternative user is a..."

(d) In the Third Schedule, the Limitation of User Clause reads "The premises are to be used as a shop for the purpose of carrying on the business of the retail sale of Confectionery on the premises."

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

5. Powers have advised that similar leases apply to each tenancy and have provided details of the permitted user attaching to each lease whereby each tenant is restricted to particular specified trading or service activities.

6. The Authority considers that Power Supermarkets Limited and the tenants are undertakings and that the notified leases are agreements between undertakings. The agreements have effect within the State.

7. The Authority considers that the notified agreements, and their restricted and exclusive user clauses and the other standard restrictive clauses and obligations, do 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 l0 September, l993, pp.665-667). The Authority therefore considers that the notified agreements between Power Supermarkets Limited and the tenants do not offend against Section 4(1) of the Competition Act, l99l.

8. 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 agreements between Power Supermarkets Limited and its tenants in relation to the lease of premises at Ennis Shopping Centre, Francis St, Ennis, Co. Clare notified under Section 7 on 30 September 1992 (notification no. CA/601/92E), do not offend against Section 4(1) of the Competition Act, l99l.

For the Competition Authority

Des Wall

Member

15 December 1993