Restriction on Goods Sold Breaches Competition Law

It is not uncommon for a landlord to want to preserve a ‘balance’ among the tenants trading in a commercial development and therefore to restrict the number of tenants in a particular trade.



A hidden danger inherent in this approach became evident recently when competition law was used to stop a landlord from enforcing such a policy.



The case arose when a tenant’s lease came up for renewal. The landlord refused to renew it on the ground that the tenant would be selling alcohol and staple goods in the neighbourhood when there was a nearby shop selling the same sorts of products.



The landlord argued that the area needed a variety of shops selling different goods and the tenant argued that the landlord’s policy had the effect of reducing competition.



The County Court agreed that the landlord’s attempt to restrict the range of goods being sold was in breach of competition law.