Retailers can breathe easier following an announcement by the Competition Commission on Friday, 24 January 2014, that, following an extensive investigation into long-term exclusive lease agreements, it will not be referring the matter to the Competition Tribunal for prosecution as "the evidence gathered did not conclusively demonstrate that the anticompetitive effects of the conduct outweighed the efficiencies claimed".
However, the Commission remains concerned about the anti-competitive effects which such agreements could give rise to where a retailer posses market power, particularly in view of the prevalence of exclusive lease agreements in the industry. The Commission stated that its
"...preliminary views were that long-term exclusive lease agreements could give rise to considerable competition concerns and could amount to practices that restrict or exclude or impede competition."
The Commission plans to address the concerns raised by the continued use of exclusive lease agreements, through actively engaging with key role-players in the industry as well as through the continued use of peremptory conditions, relating to the re-negotiation of existing exclusive lease agreements, when approving property mergers.