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Power Supermarkets/Pat Owens [1994] IECA 316 (21st April, 1994)
Notification
No. CA/1114/92E - Power Supermarkets Limited /Pat Owens.
Decision
No.316
Introduction
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.
The
Facts
(a) Subject
of the notification
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.
(b) The
parties involved
3. Power
Supermarkets Ltd is engaged in the business of a supermarket with outlets
throughout the State. Pat Owens is engaged in property development.
(c) The
notified arrangements
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.
Assessment
- The applicability of Section 4(1)
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.
The
Certificate
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.
© 1994 Irish Competition Authority
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URL: http://www.bailii.org/ie/cases/IECompA/1994/316.html