Mall exclusivity clauses under spotlight again

EXCLUSIVITY clauses in long-term lease agreements between shopping centres and their anchor tenants will be in the spotlight again after the Competition Commission announced it was looking at relaunching an investigation into the matter.

The commission has received a fresh complaint from the South African Property Owners' Association which raised concerns that the exclusivity clauses made it harder for new businesses to get into shopping malls.

Exclusive clauses limit centres from renting out to other businesses which might be in direct competition with their anchor tenants, which include the three major supermarket groups Pick n Pay, Shoprite and Spar.

Commission spokesman Mava Scott said on Tuesday the property owners' association alleged that the clauses were concerning and could lead to violation of the Competition Act.

"The commission is currently screening the complaint and will make a determination on whether to launch a full-scale investigation." Last month, the Pretoria High Court upheld an exclusive lease agreement between Pick n Pay stores and Hyprop, owner of the Cape Gate Shopping Centre in Cape Town, prohibiting new entrants from operating a general food supermarket at the shopping centre.

In Port Elizabeth, the Baywest mall is due to open next year with anchor tenants that include Checkers Hyper, Pick n Pay, Edgars and Woolworths.

Managing director Gavin Blows said the mall would take its lead from best practices.

"Baywest supports all initiatives that will benefit the consumer."

Scott said earlier this year that the commission had investigated the matter, looking at centres across the country.

The investigation did not find conclusive proof that the exclusive clause was anti-competitive.

"The evidence did not meet the test required in order to prosecute the firms involved and, therefore, the commission took a decision not to refer the matter to the tribunal," he said. - Thulani Gqirana