Notification Nos:  CA/80/92E and CA/595/92E ‑ Irish Pension Fund Property Unit Trust and Erin Executor & Trustee Company Ltd/Power Supermarkets Ltd.

Decision No: 161

Introduction

1.	Notifications were made by Irish Pension Fund Property Unit Trust (IPFPUT) on 16 September 1992 and by Power Supermarkets Ltd on 30 September, l992 with requests 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 IPFPUT and Power Supermarkets Limited.

The Facts

(a)	Subject of the notification

2.	The notification concerns the lease of units 6/7/117,   ll8, ll9, part of ll4/l0 and an extra extension on level l in the Dun Laoghaire Shopping Centre, Dun Laoghaire, Co. Dublin between IPFPUT/Erin Executor & Trustee Co. Limited as landlord and Power Supermarkets Ltd as tenant.

(b)	The parties involved

3.	Power Supermarkets Limited trades as a supermarket with outlets throughout the State. IPFPUT is a unit trust for the investment of pension and other exempt funds and through Erin Executor & Trustee Company Ltd, its trustee, is the landlord of Dun Laoghaire Shopping Centre.

(c)	The notified arrangements

4.	The notified lease was made on l0 October, l986 for a period of 25 years from 25 December, l985.  The restricted user clauses in the lease are as follows:

(a)	Under clause 4.26 the tenant covenants with the landlord

 "Not to assign transfer or underlet the Demised Unit or any part thereof But So That Notwithstanding the foregoing the Landlord shall...not unreasonably withhold its consent..."

(b)	Under clause 4.27.1 the tenant covenants with the landlord

 "Not without the prior consent in writing of the Landlord or his Agent thereunto lawfully authorised to use or to permit or suffer or allow the Demised Unit or any part or parts thereof to be used for any purpose other than as set forth in Part II of the First Schedule ... and for no other purpose or purposes whatsoever... Provided Always And It Is Hereby Agreed And Declared that when any application by the Tenant or any under‑tenant of the Tenant for liberty to alter or change the aforesaid permitted user of the Demised Unit the Landlord shall not unreasonably withhold its consent..."
(c)	In the First Schedule, Part II the permitted User is defined as "For the purpose of a Supermarket for the retail sale of foods and goods customarily sold in Supermarkets in Ireland and as a general retail store (including for the sale of hardware and drapery) and also including for the sale for consumption off the premises of intoxicating and alcoholic and non‑alcoholic drinks."

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

5.	Under a separate lease dated 10 September 1990 additional premises were leased to Power Supermarkets subject to the same covenants, restrictions and obligations.

Assessment - The Applicability of Section 4(1)

6.	The Authority considers that Power Supermarkets Limited and IPFPUT and its trustee, Erin Executor & Trustee Co. Limited are undertakings and that the notified leases are agreements between undertakings.  The agreements have effect within the State.

7.	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, l993 in respect of shopping centre leases (Iris Oifigiuil of l0 September, l993, pp.665‑667).  The Authority therefore considers that the notified agreements between IPFPUT, Erin Executor & Trustee Co. Limited and Power Supermarkets Ltd do not offend against Section 4(1) of the Competition Act, l99l.

The Certificate

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 Irish Pension Fund Property Unit Trust, Erin Executor & Trustee 
Co. Limited and Power Supermarkets Ltd in relation to the lease of the premises at Dun Laoghaire Shopping Centre, Dun Laoghaire, Co. Dublin notified under Section 7 on 16 September 1992 (notification no. CA/80/92E) and on 30 September 1992 (notification no. CA/595/92E), do not offend against Section 4(1) of the Competition Act, l99l.

For the Competition Authority

Des Wall
Member
3 December 1993