Irish Competition Authority Decisions

1. Notification was made by Michael Breen 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 G.D.Investments (Galway) Ltd and Michael Breen.

2. The notification concerns the lease of shop unit 12 in The Seamus Quirke Shopping Centre, also known as Westside Shopping Centre, Rahoon, Galway between G.D. Investments (Galway) Ltd as lessor and Michael Breen as lessee.

3. G.D. Investments (Galway) Ltd is engaged in the letting of shop units at Westside Shopping Centre. Michael Breen trades as a Newsagent/Post Office at unit 12 in the shopping centre.

4. The notified shopping centre lease was made on 29 May 1987 for a term of 35 years from 15 November, 1982. The restricted user clauses in the lease are as follows:

(a) Under Clause 12 the lessee covenants with the lessor:

".... not to use or offer to be used the said premises or any part thereof for any purpose other than that of Newsagency which expressly shall mean the sale to consumers of newspapers, magazines, sweets, minerals and cigarettes but shall in any event exclude the sale of goods and services by all those other traders as listed in the fifth schedule hereto and any wholesale trade and not to use or permit to be used the premises hereby demised for a Bank...."

The 5th Schedule lists 14 other separate trading activities.

(b) Under Clause 15 the lessee covenants with the lessor

".... not to assign charge or under-let or share or part with the possession of the premises or any part thereof or otherwise alienate same without the previous written consent of the lessor such consent not to be unreasonably withheld".

(c) Under the sixth schedule it is agreed that

".... the lessee shall have the exclusive uses as set out in Clause 12 ..... and that no other lessee his successor or assigns shall be entitled or permitted any of the said uses as in Clause 12 ...... except for Tesco (Ireland) Ltd its successors and assigns."

(d) The applicant has also indicated that under subsequent negotiations additional exclusive user of the premises has been granted for a Post Office with the sale of ice cream and the operation of a National Lottery Agency.

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

6. The Authority considers that G.D. Investments (Galway) Ltd and Michael Breen are undertakings and that the notified lease is an agreement between undertakings. The agreement has effect within the State.

7. 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 G.D. Investments (Galway) Ltd and Michael Breen does not offend against Section 4(1) of the Competition Act, 1991.

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 agreement between G.D. Investments (Galway) Ltd and Michael Breen in relation to the lease of the premises at Westside Shopping Centre, notified under Section 7 on 30 September 1992 (notification no. CA/401/92E), does not offend against Section 4(1) of the Competition Act, 1991.

For the Competition Authority

Des Wall

Member

15 December 1993