Irish Competition Authority Decisions

1. Notification was made by Phoenix Newsagents Ltd 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 Michael Reilly and Sons Ltd and Phoenix Newsagents Ltd.

2. The notification concerns the lease of a shop unit, Unit 7, Maynooth Shopping Centre, Maynooth, Co. Kildare between Michael Reilly and Sons Ltd as landlord and Phoenix Newsagents Ltd as tenant.

3. Michael Reilly and Sons Ltd was engaged in the letting of shop units at Maynooth Shopping Centre. Its successor in title, Nabola is now similarly engaged. Phoenix Newsagents Ltd, which purchased the tenancy interest in Unit 7 in December 1988 carries on the business of newsagents at the centre.

4. The notified shopping centre lease was executed on 1 November 1982 for a period of 30 years from 1 September 1982. The restricted user clauses in the lease are as follows:

(a) Under clause 10 section III of the agreement the tenant covenants "To use the demised premises for the purpose of a Newsagents shop only and not without the Landlord's consent in writing which shall not be unreasonably withheld to use or permit or suffer the same or any part thereof to be used for any other purpose (such permitted use to include retail sale of stationery cards toys and allied goods........)

(b) Under clause 12 section III the tenant covenants "not to assign sublet part with or share possession of a part (as distinct from the whole) of the demised premises under any circumstances whatever or the whole of the demised premises without the prior consent in writing of the Landlord (such consent not to be unreasonably withheld).....

(c) Under a separate covenant attached to the agreement the landlord covenants with the original tenant ..and their permitted assigns "that for so long as the within demised premises are used for the user permitted by Clause 10 of Section 3 of the within Lease that neither we the landlord nor any of our tenants in the Maynooth Shopping Centre shall carry on or permit to be permitted to carry on in the said Centre the business of a newsagency including the retail sale of stationery cards toys and allied goods."

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

5. The Authority considers that Michael Reilly and Sons Ltd were and its successors Nabola Developments Ltd, and Phoenix Newsagents 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 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 Michael Reilly and Sons Ltd (now Nabola Developments Ltd) and Phoenix Newsagents 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 Michael Reilly and Sons Ltd (now Nabola Developments Ltd) and Phoenix Newsagents Ltd in relation to the lease of the premises at Unit 5 Maynooth Shopping Centre, Maynooth, Co. Kildare notified under Section 7 on 30 September 1992 (notification no. CA/513/92E), does not offend against Section 4 (1) of the Competition Act, 1991.

For the Competition Authority

Des Wall

Member

15 December 1993