Irish Competition Authority Decisions

1. Notification was made by Power Supermarkets Ltd 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 sale agreement between Power Supermarkets Ltd and Pat Owens.

2. The notification concerns the agreement for the sale of a plot of land adjoining Powers Supermarket at Bank Place/Deal Yard Lane, Mallow, Co. Cork between Power Supermarkets Ltd as vendor and Pat Owens as purchaser. The plot was to be developed as a shopping centre with 8 shop units and a car park.

3. Power Supermarkets Ltd is engaged in the business of a supermarket with outlets throughout the State. Pat Owens is engaged in property development.

4. The notified sale agreement was made on 12 March, 1991. The restricted user clause contained in the Special Conditions to the agreement is as follows:

Under clause 6(a) the purchaser covenants " Not to use or permit to be used the property sold ....or any part thereof for the sale , supply, stocking or keeping of any food and foodstuffs on in or from the property sold or any part thereof except as part of a Restaurant or Coffee Shop operation in the property sold for consumption on the premises.

(b) not to use or permit to be used the property sold ..... or any part thereof for any of the businesses or trades of an Off-Licence, Bookmaker or Amusement and Gaming Arcade."

The sale is subject to the Purchaser obtaining Planning permission and the agreement requires the purchaser to construct a car park and complete the construction of the parade of shop units and access arrangements within a specified period.

In addition, there are a number of other standard provisions and restrictions in the sale agreement.

5. The Authority considers that Power Supermarkets Limited and Pat Owens are undertakings and that the notified sale agreement is an agreement between undertakings. The agreement has effect within the State.

6. The sale agreement contains a restrictive user clause which is designed to prevent any of the proposed shop units to be used for the purposes of the sale of foodstuffs or as an off licence. In its notice on Shopping Centre Leases, which was published in Iris Oifigiuil on 10 September 1993 (pp.665-667), the Authority expressed its conclusion that such restricted user clauses in shopping centre leases do not generally offend against Section 4(1) of the Competition Act, 1991 for the reasons stated in that notice. In this instance the site immediately adjoining the supermarket is to be developed as a shopping centre. Similarly the Authority would take the view that the inclusion of a restricted user covenant in agreements for the sale of land to be developed as a shopping centre would generally not have the object or effect of preventing, restricting or distorting competition in trade in any good or services in the State or in any part of the State. In this instance its object and effect is to enable the development of additional retail units which is pro competitive. The Authority therefore considers that the notified agreement between Power Supermarkets Ltd and and Pat Owens 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 Power Supermarkets Ltd and Pat Owens in relation to the sale of land at Deal Yard Lane, Mallow, Co.Cork notified under Section 7 on 30 September 1992 (notification no. CA/1114/92E), does not offend against Section 4(1) of the Competition Act,1991.

For The Competition Authority

Des Wall

Member

21 April 1994.