The Competition Commission was mulling the reopening of an investigation into exclusivity clauses placed within long-term lease agreements between owners of large retail shopping centres and retail anchor tenants across the country after complaints from commercial property owners.

The South African Property Owners Association (Sapoa) has requested the launch of a full-scale investigation into claims that the exclusivity clauses would hamper competition in the market and increase barriers for small competitors and potential entrants.

Sapoa claimed retailers Pick n Pay, Shoprite and Spar, among a wider group, were party to the alleged anticompetitive behaviour through the use of exclusivity clauses, which were often a condition for anchor tenants entering long-term lease agreements.

It added that the agreements ensured that rival chains, as well as fruit and vegetable sellers, liquor stores and full-line grocery stores, were excluded from tenanting in a particular shopping centre for the term of the leases, which could extend for a period of ten years, with renewal options of up to 40 years.

"Exclusivity clauses harm competition to the clear detriment of consumers. They restrict entry into the market by competing retailers, especially when a retailer’s entry strategy requires scale of activity and buying, distribution and selling networks," Sapoa CEO Neil Gopal said in a statement.

Earlier this year, the commission could not conclusively demonstrate the “anticompetitive” impact of the exclusionary clauses after examining various exclusive leases agreed and enforced by the three major supermarket groups.

“The evidence did not meet the test required to prosecute the firms involved and, therefore, the Commission took a decision not to refer the matter to the [Competition] Tribunal,” the commission pointed out.

However, the commission said it advocated against the parties entering into long-term exclusive agreements as a default for each new development and encouraged this “only where justified” by the investment made by the supermarket in a particular centre.