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Documentation: CC to bar Eurotunnel ferries from Dover

Torsdag 6. juni 2013 kl: 10:01

Af: Editorial

Eurotunnel will be stopped from operating ferry services at the port of Dover, after the Competition Commission (CC) decided that its acquisition of three ferries and other assets from the former ferry operator, SeaFrance, could mean higher prices for cross-Channel passengers and freight customers

In its final report published thursday the 6th og june the CC has concluded that by adding ferry services to its existing Channel Tunnel business, Eurotunnel would increase its market share to over half and prices would rise. This confirms the CC's provisional findings which were published in February.

The CC found that Eurotunnel decided to acquire the SeaFrance ferries in order to prevent ferry operator DFDS/LD from buying them. Eurotunnel was concerned that if DFDS/LD obtained the assets cheaply, it could drive down prices for customers. The CC also found that one of the three current ferry operators on the Dover-Calais route was likely to exit in the short term, if the CC took no action, in which case Eurotunnel could gain an even larger share of the cross-Channel market.

Chairman of the Eurotunnel/SeaFrance Inquiry Group and CC Deputy Chairman, Alasdair Smith, said:

- It cannot be good for competition when Eurotunnel, which already holds a market share of over 40 per cent, moves into the ferry business-particularly when it did so to stop a competitor from buying the ferries. Customers would lose out from Eurotunnel increasing its share even further and being able to raise prices on the tunnel services.

- In view of the current excess capacity on the Dover-Calais route, it also seems likely that one of the current ferry operators will exit in the short term if we don't take action. Customers will be better off if there are two independent ferry companies competing with the tunnel than if one of the two is owned by Eurotunnel.

- By preventing Eurotunnel from operating ferry services out of Dover, we can protect the interests of customers. We did consider ordering Eurotunnel to sell the ferries but we were conscious of the uncertainties and possible delays affecting a sale.

- We can achieve the same outcome this way and it should be clear that we will not be diverted from ensuring the best result for customers.

Eurotunnel provides rail transport services to both passengers and freight customers across the narrowest section of the English Channel via the Channel Tunnel. Until November 2011, SeaFrance provided ferry services to both passengers and freight customers across the same section of the English Channel between Dover and Calais.

Three of the four vessels and other related assets operated by SeaFrance at the time of its liquidation were subsequently bought by Eurotunnel which then launched ferry services between Calais and Dover on 20 August 2012 under the MyFerryLink brand.

At the time of the sale the French Commercial Court made an Order prohibiting the onward sale by Eurotunnel of the vessels until 2017, so an Order by the CC to sell the MyFerryLink business would be subject to delay and uncertainty as it would require the French Court to lift its Order.

Before the prohibition at Dover takes effect, Eurotunnel will be given a limited period to sell its two largest ferries to one or more purchasers approved by the CC as a means of solving the competition problem that the CC has found (see Notes for editors). This will ensure that all Dover-Calais ferry services are run by companies which are independent from the competing rail link.

The final report and all other information relating to the investigation are available on the inquiry home page. The deadline for the final report is 9 June 2013, which was extended by eight weeks from the date originally indicated when the case was referred by the Office of Fair Trading.

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