Eurotunnel’s takeover of three cross channel ferries from defunct operator SeaFrance has fallen foul of competition authorities.
The Competition Commission said passengers and freight customers could face higher prices following the deal struck last year.
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, it provisionally found today.
The Competition Commission also found that Eurotunnel decided to acquire the SeaFrance ferries in order to prevent ferry operator DFDS/LD from buying them.
Eurotunnel was concerned that if DFDS/LD obtained the assets cheaply, it could drive down prices for customers.
The news will be welcomed by P&O Ferries which has been campaigning against the SeaFrance ship takeover. This saw Eurotunnel launch ferry services between Dover and Calais under the MyFerryLink brand in August.
The final report from the commission is due to be published by by April 14.
Competition Commission deputy chairman Alasdair Smith, chairman of the Eurotunnel/SeaFrance inquiry group, 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%, 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.”
He added: “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.
“We will now look at how we can protect competition in this market. Whilst our focus is primarily on customers’ interests, we will also consider carefully the interests of the ferry employees.”
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