Channel Ferry Service Given Six-Months Notice

Posted by George Backwell
Friday, June 27, 2014
Cross-channel ferry: Image MyFerryLink

Britain's competition regulator has told Groupe Eurotunnel, the operator of the undersea rail link between Britain and France, it will have to stop operating its separate cross-channel ferry service in the next six months and find a buyer for the ships, confirming a decision it made in May.

Eurotunnel immediately said it would appeal an "absurd" decision, which it said would mean higher prices for consumers and put 600 people out of work.

Groupe Eurotunnel operator started to operate services on the Dover-Calais crossing in 2012 under the MyFerryLink brand when it acquired three ferries from the now-defunct SeaFrance service owned by French railways operator SNCF.

"Eurotunnel will be given six months to stop running services from the date of an order to that effect. It could also find another owner for the MyFerryLink business, if that made MyFerryLink completely independent of Eurotunnel," the Competition and Markets Authority (CMA) said on Friday.

The regulator repeated its justification that with two of the operators on the ferry route running at a loss, the current level of competition was not sustainable and could lead to the exit of a competitor.

As well as Eurotunnel, which operates its vessels under the MyFerryLink brand, Danish ferry operator DFDS and Britain's P&O Ferries also run boats on the Dover-Calais crossing, competing against the rail link for freight and passengers.

DFDS has said it is losing between 8 to 10 million Danish crowns ($1.47-1.84 million) a month as a result of MyFerryLink.

"Today's final report from the CMA is good news for DFDS and our 1,300 employees providing ferry services on the English Channel ... We hope the decision will be implemented as swiftly as possible," Niels Smedegaard, CEO of DFDS said in a statement.

Eurotunnel said in a statement that by removing one competitor from the market, CMA was creating a "de facto monopoly", which will lead to higher prices for consumers and lower revenue for the ports of Dover and Calais.

"The decision by 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," Eurotunnel's chief executive Jacques Gounon said.

(By Sarah Young and Dominique Vidalon)
 

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