COMPETITION AUTHORITY

Competition Authority Decision of 5 October 1993 relating to a proceeding under Section 4 of the Competition Act, l99l.

Notification No:  CA/1112/92E ‑ Five Star Supermarket/C&W Properties Ltd and Five Star Supermarket/Gerald and Margaret Conway.

Decision No: 82

						

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Notification No. CA/1112/92E ‑ Five Star Supermarket/C&W Properties Ltd and Five Star Supermarket/Gerald and Margaret Conway

Decision No. 82

Introduction

1.	Notification was made by Gerald Conway 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 Gerald and Margaret Conway and Five Star Supermarket and C&W Properties Ltd.

The Facts

(a)	The subject of the notification

2.	The notification concerns the leases on 2 adjoining shop units at Quinnsworth Arcade, Sligo Shopping Centre, O'Connell St. Sligo i.e. Unit 7 between Five Star Supermarket as lessor and C&W Properties Ltd as lessee and Unit 13 between Five Star Supermarket as lessor and Gerald and Margaret Conway as lessee.

(b)	The parties involved

3.	Five Star Supermarket is engaged in the business of a  supermarket and in the letting of shop units at Sligo Shopping Centre. Gerald and Margaret Conway and C&W Properties Ltd are engaged in the business of newsagents. Gerald Conway is a director of C&W Properties Ltd.

(c)	The notified arrangements

4.	The notified shopping centre lease in repect of Unit 7 was executed on 3 April 1975 for a period of 35 years from 1 September 1974 between Sligo Shopping Centre Ltd as lessor and Star Artistes Ltd as lessee. Five Star Supermarket subsequently succeeded to the lessor interest while the lessee interest was subsequently assigned to Gerald and Margaret Conway and later assigned to C&W Properties Ltd. The restricted user clauses in this lease are as follows:‑

(a)	Under clause E.15 the lessee covenants 
	
	"Not to assign....or underlet or share or part with the possession of the demised premises or any part thereof .... without the previous written consent of the Lessor such consent not to be unreasonably witheld."

(b)	Under clause E.12  the lessee covenants 

	".....not to use or suffer to be used the demised premises or any part thereof for Banking purposes nor as a Restaurant nor for any other purpose other than as a retail shop for the sale of records cassettes, sound reproduction equipment, electrical equipment and allied and ancillary goods without the consent of the lessor..."

By way of document under seal Five Star Supermarket as owner of the lessor's interest consented subsequently to change of user which was further extended in 1986 "to fancy goods, confectionery, newspapers and related goods". This was later extended to the C&W Properties tenure when the lease was assigned to that company in 1989.

5.	The notified lease in respect of Unit 13 was executed on 12 November 1990 between Five Star Supermarket as lessor and Gerald and Margaret Conway as lessee for a term of 20 years from 1 September 1989. The restricted user clauses in this lease are as follows:‑

(a)	Under clause E.15 the lessee covenants 

	"Not to assign....or under‑let or share or part with the possession of the demised premises or any part thereof ....without the previous written consent of the Lessor such consent not to be unreasonably witheld."

(b)	Under clause E.12 the lessee covenants 

	"....not to use or suffer to be used the demised premises or any part thereof for Banking purposes or as a Restaurant nor for the sale of intoxicating liquor nor for any other purpose other than as a Shop for the Retail sale of fancy goods confectionery newspapers and magazines tobacco and cigarettes and related goods without the consent of the lessor under its seal first obtained......"

6.	In addition, there are a number of other standard restrictive covenants and obligations in both leases.

Assessment ‑ The applicability of Section 4 (1)

7.	The Authority considers that Five Star Supermarket, C&W Properties Ltd and Gerald and Margaret Conway are undertakings and that the notified leases are agreements between undertakings. The agreements have effect within the State.

8.	The Authority considers that the notified agreements, and their restricted and exclusive user clauses and the other standard restrictive clauses and obligations, do 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 Five Star Supermarket and C&W Properties Ltd and the notified agreement between Five Star Supermarket and Gerald and Margaret Conway do not offend against Section 4 (1) of the Competition Act 1991.

The Certificate

9.	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 Five Star Supermarket and C&W Properties Ltd in relation to the lease of the premises at Unit 7 Quinnsworth Arcade, Sligo Shopping Centre, and the agreement between Five Star Supermarket and Gerald and Margaret Conway in relation to the lease of the premises at Unit 13, Quinnsworth Arcade, Sligo Shopping Centre, O'Connell St. Sligo notified under Section 7 on 30 September 1992 (notification no. CA/1112/92E), do not offend against Section 4 (1) of the Competition Act, 1991.

For the Competition Authority

Des Wall
Member
5 October 1993