Irish Competition Authority Decisions

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

2. The notifications concern the leases of shop units at Sligo Shopping Centre, O'Connell St., Sligo between Five Star Supermarket as lessor and 11 tenants.

3. Five Star Supermarket is engaged in the business of supermarkets and the letting of shop units. It is successor in title to Sligo Shopping Centre Ltd the original lessor in respect of 7 tenancies. A further 5 units have subsequently been leased by Five Star as lessor. The tenants are engaged in various retailing activities at Sligo Shopping Centre.

4. The sample shopping centre lease notified, which applies to Unit 1, was executed on 27 February 1976 for a term of 35 years from 1 September 1974. The restricted user clauses in the lease are as follows:-

under clause E.12 the tenant covenants ".......not to use or suffer to be used the demised premises or any part thereof for banking purposes (save for the exchange and sale of travellers' cheques and as a Bureau de Change) nor as a restaurant nor for any other purpose other than as a Travel agency, and sale of travel goods and sundries, greeting cards of all descriptions, stationery and table stationery, books, magazines, souvenirs, gift ware,...pipes, tobacco and cigarettes, without the consent of the Lessor under its seal first obtained."

under clause E.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......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 advised that similar terms apply to the other leases with the restricted user clause E.12 restricting each tenant to particular specified trading activities.

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

7. The Authority considers that the sample agreement notified, 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 agreements between Five Star Supermarket and its tenants do not offend against Section 4 (1) of the Competition Act 1991.

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 leases of the premises at Sligo Shopping Centre, O'Connell St., Sligo notified under Section 7 on 30 September 1992 (notification No. CA/610/92E), do not offend against Section 4 (1) of the Competition Act, 1991.

For the Competition Authority

Des Wall

Member

5 October 1993