A Competition Commission has banned Eurotunnel from running cross-channel ferries out of Dover, saying that the company was attempting to monopolise and corner the national gateway-port’s local cross-channel transport market and accused Eurotunnel of aggressive buying. However, Eurotunnel claims that 600 jobs at the Eurotunnel’s ‘Myferrylink’ business venture are threatened and have roundly condemn the ruling, describing it as “incomprehensible and seriously disproportionate.”
Written by Chris White
The Competition Commission’s investigation was launched after Eurotunnel bought up 3 ferries from the bankrupt Sea France ferry company in August 2012 for €60 million (£52 million), to launch a new sub-company called ‘Myferrylink’.
The Competition Commission said that the ban would not be imposed immediately and that Eurotunnel would be granted sufficient time in which to sell two of its largest ferries however, a the decision will need to be cleared by a French Commercial Court which has ruled that the ferries cannot be sold for another 5 years in order to protect the rights of employees.
In its 134-page report the Competition Commission explained that the Eurotunnel’s new ferry service when combined with the Euro Tunnel, accounted for more than 50% of the all cross-channel commercial traffic from Dover and that there was a danger that Eurotunnel could use its growing strength to artificially drive up fares and buy out competition.
The report also voiced concerns that Eurotunnel’s buying tactics were deliberately calculated to prevent the ferry operator DFDS, from purchasing the 3 vessels in order to drive DFDS out of the market, or possibly even into bankruptcy.
Speaking to journalists Alasdair Smith, Deputy Chairman of the Competition Commission 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.”
However, Eurotunnel’s Chief Executive and Chairman Jacques Gounon dismissed the report saying in a statement: “This decision by the Competition Commission will reduce the choice of services across the strait of Dover to the detriment of the consumer. It will inevitably lead to an increase in the price of a crossing.”
The report comes a year after the Euro Tunnel captured 46% of all freight and passenger traffic between Dover and Calais.
Eurotunnel have said that they will contest the decision by appeal.
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