Wednesday 26th Oct 2016 - Logistics Manager

Competition Commission challenges Eurotunnel ferry plan

By adding ferry services to its existing Channel Tunnel business, Eurotunnel would significantly increase its already high share of the cross-Channel market and prices would rise, the Competition Commission has concluded in its provision findings in relation to Eurotunnel’s acquisition of SeaFrance assets.

Alasdair Smith, chairman of the Eurotunnel/SeaFrance Inquiry Group and CC Deputy Chairman, said: “It would seem that Eurotunnel moved into the ferry business because it was concerned at the increased competition it would face if another operator bought the assets. Given that the company already holds a market share of over 40 per cent, we’re concerned that customers could 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 is likely to exit in the short to medium term. We think that 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.”

The findings have been challenged by Eurotunnel which argues that since the favourable opinion given by the French Competition Authorities in 2012, it would appear the existing ferry operators in the Short Straits market have sought to use the process initiated by the British Competition Authorities to protect their own interests from new entrants and increased competition.

Eurotunnel considers that the acquisition of the ex SeaFrance ships, nine months after that company ceased all operations, and the creation of a new competitor in the cross-Channel marketplace, MyFerryLink, constitutes an increase in competition and brings additional choice for customers.

Chief executive Jacques Gounon said: “Eurotunnel intends to continue to work with the Competition Commission to allay the concerns raised by existing ferry operators and to demonstrate that the creation of MyFerryLink is a good thing for the market as it is both pro-customer and pro-competition.”