Irish Competition Authority Decisions

1. Notification was made by Light Bite 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 Crumlin Investments Ltd and Light Bite.

2. The notification concerns the lease of the Supermarket unit at Crumlin Shopping Centre, Crumlin Rd., Dublin 12 between Crumlin Investments Ltd as Landlord and Light Bite as tenant.

3. Crumlin Investments Ltd is engaged in the letting of shop units at Crumlin Shopping Centre. Light Bite is a subsidiary of Power Supermarkets Ltd which is engaged in the business of supermarkets throughout the State.

4. The notified shopping centre lease was executed on 1 January 1979 for a term of 35 years from 17 October 1974. The restricted user clauses in the lease are as follows:-

(a) Under clause 4 (19)(a) the tenant covenants with the landlord "Not to use or occupy the demised premises or any part thereof or permit the same to be used or occupied except with the consent in writing of the Landlord (such consent not to be unreasonably withheld but in considering and giving such consent the Landlord shall be entitled to have full regard to the principles of good estate management for any other purpose than the trade and business of a supermarket Retail Store but not for any of the trades or businesses of jeweller (other than for sale of costume jewellery), watchmaker, hairdresser, beautician, restauranteur, Bank, Building Society, Travel Agent, employment agent, accommodation agent, model or photographic agent, auctioneer, estate agent or credit company or for the sale of motor accessories, sports goods and equipment, furniture and foods cooked on the premises other than chickens cooked on the premises or any of them and PROVIDED that an area not exceeding 10,000 square feet can be used for the retail sale of shoes, textiles clothing of all descriptions and costume jewellery and the remainder of the demised premises being used for the sale and storage of food and other products now sold in Supermarkets including intoxicating liquor for consumption off the premises."

(b) Under clause 4(16) the tenant covenants

"(a) Not to assign underlet or part with the possession control or occupation of nor to franchise the use of part only of the demised premises Provided Always that the Tenant may franchise the use of (an area) in the demised premises not exceeding in area ten thousand square feet to Penneys Limited.

(b) Not to assign underlet or part with the possession of control or occupation of nor to franchise the use of the whole of the demised premises without the licence in writing of the Landlord first obtained which licence shall not be unreasonably withheld in the case of a respectable and responsible assignee or underlessee proof of which is furnished to the Landlord PROVIDED ALWAYS ....."

(c) Under clause 7(6) the Landlord covenants "Not during the term to grant a Lease for or to sell or permit or suffer the sale by any of its Tenants or so far as within the Landlord's control any sub or under tenants of groceries or food products in or over an area exceeding 3,000 square feet in any one Unit forming part of the Shopping Centre unless so ordered or directed by any Court of competent jurisdiction."

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

5. The Authority considers that Crumlin Investments Ltd and Light Bite 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 Crumlin Investments Ltd and Light Bite 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 Crumlin Investments Ltd and Light Bite in relation to the lease of the premises at Crumlin Shopping Centre, Crumlin Road, Dublin notified under Section 7 on 30 September 1992 (notification no. CA/460/92), does not offend against Section 4(1) of the Competition Act, l99l.

For the Competition Authority

Des Wall

Member

4 February 1994