MyFerryLink faces Dover ban
Competition Commission moves to block Eurotunnel from a monopoly on cross-Channel links and forcing up prices
EUROTUNNEL’S MyFerryLink ferry services are to be banned from using the port of Dover by the Competition Commission.
The move by the UK monopolies watchdog comes as it says that the combination of the operator’s Channel Tunnel operations and its three MyFerryLink ferries will force up fares on the short-crossing route.
No date has yet been set for the ban to be enforced and Eurotunnel has lodged an appeal.
Eurotunnel bought three ferries and other assets from bankrupt SeaFrance in a €65 million deal and leased them back to a cooperative of former SeaFrance under the MyFerryLink brand to sail under the French flag.
Now the Commission has ruled that Eurotunnel bought the SeaFrance ferries “to prevent ferry operator DFDS/LD from buying them”.
It added in a statement: “Eurotunnel was concerned that if DFDS/LD obtained the assets cheaply, it could drive down prices for customers. The Commission 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 Commission 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%, 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.
“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.”
Eurotunnel is to be given a “limited period” to sell its two largest ferries as a means of solving the competition problem and to ensure that all Dover-Calais services are run by competing companies.
The Channel Tunnel operator has lodged an appeal with chief executive officer Jacques Gounon saying it was a “serious and disproportionate” decision. He added: “This decision by the Competition Commission will reduce the choice of services across the Straits of Dover to the detriment of the consumer. It will inevitably lead to an increase in the price of a crossing”.
