Musgraves Ltd/Licensees and Franchise [1994] IECA 354 (19th September, 1994)

Musgraves Ltd/Licensees and Franchise [1994] IECA 354 (19th September, 1994)

The Authority found that the exclusive purchasing and related restrictions in the Musgraves agreements restrict competition in the grocery market by limiting both retailers' and suppliers' freedom, and that the pro-competitive justifications and proposed amendments did not sufficiently address these concerns. The agreements, as notified, offend Section 4(1) of the Competition Act, 1991 and do not qualify for a certificate or licence.

Citation
[1994] IECA 354
Parties
Notifier/wholesaler: Musgraves Ltd; Licensees: 352 Licensees (independent retailers); Franchisees: 18 Franchisees
Jurisdiction
Ireland
Procedural Posture
Competition Authority Decision / Decision on Notification for Certificate or Licence Under Section 4 of the Competition Act, 1991
Outcome
Refusal of certificate or licence under Section 4 of the Competition Act, 1991
Legal Topics
Exclusive Purchasing Agreements, Franchise Agreements, Licensee Agreements, Market Competition, Restrictive Practices, Block Exemption Regulations, Non Compete Clauses
Competition Law Exclusive Purchasing Agreements Franchise Agreements Licensee Agreements Market Competition Restrictive Practices Block Exemption Regulations Non Compete Clauses

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Parties

Musgraves Ltd

Notifier/wholesaler

352 Licensees (independent retailers)

Licensees

18 Franchisees

Franchisees

Procedural Posture

Competition Authority Decision / Decision on Notification for Certificate or Licence Under Section 4 of the Competition Act, 1991

Legal Issues

  1. 1 Whether the notified Musgraves licensee and franchise agreements prevent, restrict or distort competition contrary to Section 4(1) of the Competition Act, 1991
  2. 2 Whether the agreements qualify for a certificate or licence under the Act

Ratio Decidendi

The Authority found that the exclusive purchasing and related restrictions in the Musgraves agreements restrict competition in the grocery market by limiting both retailers' and suppliers' freedom, and that the pro-competitive justifications and proposed amendments did not sufficiently address these concerns. The agreements, as notified, offend Section 4(1) of the Competition Act, 1991 and do not qualify for a certificate or licence.

Court Disposition

Refusal of certificate or licence under Section 4 of the Competition Act, 1991

Orders

  • No certificate or licence granted for the notified Musgraves licensee and franchise agreements.