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 a lease between Arthur's Quay Developments Limited and Power Supermarkets Ltd.

2. The notification concerns the lease relating to the supermarket unit in Arthur's Quay Centre, Arthur's Quay, Limerick between Arthur's Quay Developments Limited as landlord and Power Supermarkets Ltd as tenant.

3. Power Supermarkets Limited is engaged in the business as a supermarket with outlets throughout the State. Arthur's Quay Developments Limited was the developer and landlord of the Arthur's Quay Centre.

4. The notified lease was part of an agreement for lease dated 6 May 1988 with a term of 700 years from l May, l989 or such other date that may be agreed by the parties. The restricted user clauses in the lease are as follows:

(a) Under clause 4.21 the tenant covenants with the landlord "Not during the first fifteen years of the term hereby granted without the prior consent in writing of the Landlord or its Agent thereunto lawfully authorised to use or permit or suffer or allow the Demised Premises or any part or parts thereof to be used for any purpose other than as set forth in Part II of the First Schedule hereto and for no other purpose or purposes whatsoever PROVIDED ALWAYS AND IT IS HEREBY AGREED AND DECLARED that upon any application by the Tenant or any under-Tenant of the Tenant for liberty to alter or change the aforesaid permitted user of the Demised Premises the Landlord shall not unreasonably withhold its consent..."

(b) Under clause 5.6.1 the landlord covenants with the tenant "For so long as the Demised Premises are used as a Supermarket the Landlord for itself its successors and assigns hereby covenants with the Tenant that it its successors and assigns will not lease or sell any unit in the Shopping Centre other than Units in the area hatched in Blue on the map annexed hereto in Appendix A for the purposes of a butchers shop or a greengrocers shop."

(c) Under Clause 5.6.2 the landlord covenants with the tenant "For so long as the Demised Premises are used as a Supermarket the Landlord hereby covenants to refuse its consent to a change of user of any unit in the Shopping Centre other than a unit in the area hatched in Blue on the map annexed hereto in Appendix A whereby the Unit would be used as a Butchers shop or a Greengrocers shop."

(d) In the First Schedule, Part II the permitted user is defined as follows "As a Supermarket and/or Departmental Shop or Store and/or Retail Shop or store including the sale or baking of food or food products of all kinds trading by way of licensing and franchising and making concessions and for the sale of Intoxicating Liquor whether for consumption on or off the premises."

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

5. The Authority considers that Power Supermarkets Limited and Arthur's Quay Developments 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, l993 in respect of shopping centre leases (Iris Oifigiuil of l0 September, l993, pp.665-667). The Authority therefore considers that the notified agreement between Arthur's Quay Developments Limited and Power Supermarkets Ltd 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 Arthur's Quay Developments Limited and Power Supermarkets Ltd in relation to the lease of the premises at Arthur's Quay Centre, Arthur's Quay, Limerick notified under Section 7 on 30 September 1992 (notification no. CA/587/92E), does not offend against Section 4(1) of the Competition Act, l99l.

For the Competition Authority

Des Wall

Member

15 December 1993