Irish Competition Authority Decisions

1. Notification was made by Ballybane Pharmacy Limited 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 lease between Galway Homes Ltd and Ballybane Pharmacy Ltd.

2. The notification concerns the lease of a shop unit 4 at Ballybane Shopping Centre, Ballybane, Galway between Galway Homes Ltd as Landlord and Ballybane Pharmacy Ltd as tenant.

3. Galway Homes Ltd is a development company and landlord of shop units at Ballybane Shopping Centre. Ballybane Pharmacy Limited trades as a pharmacy at unit 4.

4. The notified shopping centre lease was executed on 22 April, l989 for a term of 999 years from l December, l982. The restricted user clauses in the lease are as follows:-

(a) Under Clause 3(12) the tenant covenants with the landlord "To use the demised premises only for the carrying on of the trade, provision of the services or sale by retail of the goods set out in the Fourth Schedule hereto and not without the Landlord's consent in writing to use or permit to suffer the same or any part thereof to be used for the carrying on of any other trade, provision of any other service or the sale of any other goods or for any other purpose whatever .......

(b) Under clause 3(14)(a) the tenants covenants "Not to assign, sub-let, part with or share possession or occupation of the demised premises or any part thereof or suffer any person to occupy or use the demised premises or any part thereof as licensees without the consent in writing of the Landlord being first obtained."

(c) The Fourth Schedule under the heading LIMITATION OF USER CLAUSE reads "The sale of goods normally sold in a Chemist Shop or Pharmacy".

(d) Under clause 4(4) "the Lessor hereby covenants during the term hereby created not to carry on or permit to be carried on in or upon the nearby premises or any part of the Ballybane Shopping Centre the trade or business of a Chemist shop or Pharmacy (hereinbefore covenanted to be carried on by the Lessee upon the premises)"

5. The Authority considers that Ballybane Pharmacy Limited and Galway Homes 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 10 September 1993, pp.665-667). The Authority therefore considers that the notified agreement between Galway Homes Ltd and Ballybane Pharmacy Ltd 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 agreement between Galway Homes Limited and Ballybane Pharmacy Limited in relation to the lease of the premises at Ballybane Shopping Centre, Ballybane, Galway notified under Section 7 on 30 September 1992 (notification no. CA/731/92E), does not offend against Section 4 (1) of the Competition Act, 1991.

For the Competition Authority.

Des Wall

Member

15 December 1993