Irish Competition Authority Decisions

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 a lease between Mall Holdings Ltd and Five Star Supermarket.

2. The notification concerns the lease of the Supermarket unit in the Crescent Shopping Centre, Dooradoyle, Limerick between Mall Holdings Ltd as Lessor and Five Star Supermarket as lessee.

3. Five Star Supermarket, an unlimited company is engaged in trading as a supermarket. Mall Holdings Ltd is engaged in the letting of shop units at the Crescent Shopping Centre.

4. The notified lease was made on 7 February, l983 for a period of 500 years from l January, l979. The restricted user clauses in the lease are as follows:

(i) Under clause H 8 the lessee covenants with the Lessor

"... not to use or permit or suffer to be used the demised premises or any part thereof for banking purposes nor as a restaurant nor without the prior consent in writing of the Lessor (which consent shall not be unreasonably withheld) for any purpose other than as a Food Supermarket and all business ancillary to a food supermarket (including a bakery) and for the sale of intoxicating liquor for consumption off the demised premises and for the sale by retail of hardware and drapery."

(ii) Under clause L (iii) the Lessor covenants with the lessee

"....for itself and its assigns hereby further covenants with the Lessee its successors and assigns that it shall not during the currency of the term granted by these presents without the prior consent of the Lessee:-

(a) demise on foot of a single Lease any Shop Unit having for the purpose of the sale by retail of food foodstuffs drinks or beverages a sales area in excess of 2,000 square feet or any two or more adjoining Shop Units having for the like purpose together an aggregate sales area in excess of 2,000 square feet

(b) sell (save for consumption on the premises) food foodstuffs drinks or beverages in an area exceeding 2,000 square feet in any other Shop Unit in the Shopping Centre whether by itself or its successors in title or any holding company subsidiary company or associated company of the Lessor

(c) permit or suffer any area within the blue section to be used for the sale by retail of food foodstuffs drinks or beverages."

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

5. The Authority considers that Five Star Supermarket and Mall Holdings 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 Mall Holdings Ltd and Five Star Supermarket 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 Mall Holdings Ltd and Five Star Supermarket in relation to the lease of the premises at Crescent Shopping Centre, Dooradoyle, Limerick notified under Section 7 on 30 September 1992 (notification no. CA/608/92E), does not offend against Section 4(1) of the Competition Act.

For the Competition Authority

Des Wall

Member

5 October 1993