Irish Competition Authority Decisions

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Cite as: [1993] IECA 259

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Five Star Supermarket/Tenants of Clonmel Shopping Centre [1993] IECA 259 (15th December, 1993)

Notification No: CA/614/92E - Five Star Supermarket/Tenants of Clonmel Shopping Centre.

Decision No: 259

Introduction

1. Notification was made by Five Star Supermarket 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 leases between Five Star Supermarket and its tenants at Clonmel Shopping Centre.

The Facts

(a) Subject of the notification

2. The notification concerns the leases relating to 3 shop units in the Clonmel Shopping Centre, Gladstone St, Clonmel, Co. Tipperary between Five Star Supermarket as Lessor and the tenants.

(b) The parties involved

3. Five Star Supermarket, an unlimited company, trades as a supermarket at the centre and, as successor in title, is the owner and landlord of 3 units at the Clonmel Shopping Centre. The tenants are engaged in various retail activities at the shopping centre.

(c) The notified arrangements

4. The standard shopping centre lease notified contains the following restricted user clauses viz.

(a) Under clause 12 the tenant covenants "...not to use or suffer to be used the demised premises or any part thereof for Banking purposes nor as a Restaurant nor for any purpose other than as a retail shop without the consent of the Lessor under its Seal first obtained."

(b) Under clause 15 the tenant covenants "Not to assign (other than by way of Mortgage) or underlet or share or part with the possession of the demised premises or any part thereof or otherwise alienate same without the previous written consent of the Lessor such consent not to be unreasonably withheld."

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

5. Five Star Supermarket has supplied details of the permitted user attaching to each lease whereby the tenant is restricted to particular specified retail activities.

Assessment - The Applicability of Section 4(1)

6. The Authority considers that Five Star Supermarket and the tenants are undertakings and that the notified leases are agreements between undertakings. The agreements have effect within the State.

7. The Authority considers that the notified agreements, and their restricted and exclusive user clauses and the other standard restrictive clauses and obligations, do 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 agreements between Five Star Supermarket and its tenants do not offend against Section 4(1) of the Competition Act, l99l.

The Certificate

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 agreements between Five Star Supermarket and its tenants in relation to the lease of the premises at Clonmel Shopping Centre, Gladstone St, Clonmel, Co. Tipperary notified under Section 7 on 30 September, l992 (notification no. CA/614/92E), do not offend against Section 4(1) of the Competition Act, l99l.

For the Competition Authority

Des Wall

Member

15 December 1993