Competition ruling set to sink Eurotunnel's ferry service

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Britain’s competition regulator has told Eurotunnel it must close the cross-channel ferry service it operates.

The company which owns the undersea rail tunnel link between Britain and France has been given six months to end the crossings. Alternatively it could find a buyer for its ships.

The UK authorities said the decision was because the current level of competition is not sustainable and could lead to the exit of a competitor.

Eurotunnel’s MyFerryLink brand and Danish operator DFDS both run at a loss, only Britain’s P&O Ferries makes a profit.

Eurotunnel – which started the service in 2012 when it acquired three ferries from the now-defunct SeaFrance line owned by French railways operator SNCF – plans to appeal.

It said in a statement that by removing one competitor from the market, CMA was creating a “de facto monopoly”, which would 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.

The French transport ministry responded that there is room for three operators.

French transport minister Frederic Cuvillier said his government would do all it could to “find a solution allowing the ships to continue operating and to preserve jobs,” noting that 533 jobs were at risk in France and 71 in Britain.

Niels Smedegaard, CEO of DFDS said this was “good news for DFDS and our 1,300 employees providing ferry services on the English Channel”. He added: “We hope the decision will be implemented as swiftly as possible.”

with Reuters

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