Friday 28th Oct 2016 - Logistics Manager

CMA confirms MyFerryLink ban

The UK’s Competition and Markets Authority has confirmed its decision to bar Eurotunnel from operating its MyFerryLink service from Dover.

It has given Eurotunnel six months to stop running services from the date of an order to that effect.

Eurotunnel could also find another owner for the MyFerryLink business, if that made MyFerryLink completely independent of Eurotunnel. The ban lasts for ten years.

Alasdair Smith, Chairman of the Eurotunnel remittal group and CMA panel deputy chair, said: “With two of the operators on the Dover–Calais route making substantial losses, it remains our view that the current level of competition on the route is unsustainable and likely to lead to the exit of a competitor. That will leave Eurotunnel, which is funding MyFerryLink’s current losses, as one of only two ferry operators in addition to owning the competing rail link. Eurotunnel’s purchase of the ferries means it now has over half the market and its share will rise further if competitors exit.

“It would be much better for passengers and freight customers to have three competing cross-Channel operators – with Eurotunnel running the rail link and two independent operators on the ferry route. We will stop MyFerryLink running services out of Dover while it is owned by Eurotunnel but we would not prevent Eurotunnel from finding a suitable purchaser that was completely independent of Eurotunnel to operate the ferry service.”

The CMA decision was described as “absurd” by Eurotunnel. Jacques Gounon, chairman and chief executive officer of Groupe Eurotunnel SA said: “The decision by the CMA is a denial of the reality of the situation. It penalises the consumer and puts 600 people out of work without any real justification.”

It argues that the channel freight market has changed dramatically, in terms of competition and growth since 2011/2012, when SeaFrance went into administration. “The current freight market shares by operator: Eurotunnel: 37 per cent, P&O: 29 per cent, DFDS: 24 per cent, MyFerryLink: 9 per cent show that the competitors in the ferry market have strong positions that are in no way threatened by MyFerryLink.”

Eurotunnel said it was astonished by the length of the prohibition, which includes any minority participation, and also that the CMA recommends selling the ships to another operator.

“Groupe Eurotunnel can only appeal such an un-just decision,” it said.