Irish Competition Authority Decisions

1. Notification was made by Divilly's (Galways Leading Butchers) Ltd (Divilly's) 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 Divilly's.

2. The notification concerns the lease of unit No. 9 in The Seamus Quirke Shopping Centre, also known as Westside Shopping Centre, Rahoon, Galway between G.D. Investments (Galway) Ltd as lessor and Divilly's as lessee.

3. G.D.Investments (Galway) Ltd is engaged in the letting of shop units at the shopping centre. Divilly's trades as a butcher/greengrocer at the shopping centre).

4. The notified shopping centre lease was made on 21 February, 1989 for a period 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 landlord:

"... not to use or offer to be used the said premises or any part thereof for any purpose other than that of (Victualler, Greengrocer, Grocer, Fishmonger ....) which expression shall mean .....but shall in any event exclude the sale of (goods and services provided by all those 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....."

(b) Under Clause 15 the tenant covenants with the landlord:

"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 and to be unreasonably withheld".

(c) In the Sixth Schedule to the lease the tenant and the landlord further agreed:

".... that the lessee shall have the exclusive users as set out in Clause 12 ...... and that no other lessee (his successors or assigns) shall be entitled or permitted any of the said uses as in Clause 12 ..... except for Tesco Ireland Limited (its successors and assigns) and the Newsagency which shall be permitted to sell only fruit".

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

5. The Authority considers that Divilly's and G.D. Investments (Galway) 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 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 Divilly's 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 G.D.Investments (Galway) Ltd and Divilly's (Galways Leading Butchers) Ltd in relation to the lease of the premises at Westside Shopping Centre, Rahoon, Galway notified under Section 7 on 30 September 1992 (notification no. CA/318/92E), does not offend against Section 4(1) of the Competition Act, 1991.

For the Competition Authority

Des Wall

Member

5 October 1993