Irish Competition Authority Decisions

1. Notification was made by Mary Jo Duffy on 29 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 Power Supermarkets Limited and Mary Jo Duffy.

2. The notification concerns the lease of unit 13, The Town Centre, Francis St, Ennis, Co. Clare between Power Supermarkets Limited as Landlord and Mary Jo Duffy as tenant.

3. Power Supermarkets Limited trades as a supermarket with outlets throughout the State. Mary Jo Duffy trades as a retail pharmacy at the shopping Centre.

4. The notified lease was made on 2 November, 1986 for a term of 23 years from 1 January, 1985. The restricted user clauses in the lease are as follows:

(a) Under clause 4(24) the tenant covenants with the landlord "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 with the landlord "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 with the landlord "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 Retail Butchers Shop or Newsagency or if the Landlord considers that (a) the alternative user will compete excessively with any trade or business being carried on or upon any other portion of the Town Centre or upon any adjoining or neighbouring property of the Landlord ....."

(d) In the Third Schedule, the Limitation of User Clause is defined as follows "The premises are to be used as a Dispensary Pharmacy/Chemist's Shop for the purpose of carrying on the business of a Dispensing Pharmacy/Chemist on the premises".

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

5. The Authority considers that Mary Jo Duffy and Power Supermarkets Limited 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 of 10 September, 1993, pp.665-667). The Authority therefore considers that the notified agreement between Power Supermarkets Limited and Mary Jo Duffy 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 Power Supermarkets Limited and Mary Jo Duffy in relation to the lease of the premises at The Town Centre, Francis St, Ennis Co. Clare notified under Section 7 on 29 September 1992 (notification no. CA/211/92E), does not offend against Section 4(1) of the Competition Act, l99l.

For the Competition Authority

Des Wall

Member

15 December 1993