Freight News, Sea

Updated: MyFerryLink to be given six months to quit the Channel

[ June 27, 2014   //   ]

The UK’s Competition and Markets Authority (CMA) has confirmed its decision that Eurotunnel should be barred from operating its Dover/Calais MyFerryLink service. Eurotunnel will be given six months to stop running services from the date of an order to that effect or find another, independent owner for the MyFerryLink business.

The Channel Tunnel operator acquired three ferries and from bankrupt French state operator SeaFrance in 2012 and launched it under the MyFerryLink brand.

Chairman of the Eurotunnel Remittal Group and CMA panel deputy chair, Alasdair Smith, 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 would leave Eurotunnel as one of only two ferry operators in addition to owning the competing rail link, he said. Eurotunnel currently now has over half the market and its share will rise further if competitors exit.

He added: “We would not prevent Eurotunnel from finding a suitable purchaser that was completely independent of Eurotunnel to operate the ferry service.”

But Eurotunnel described the CMA’s decision as “absurd”, adding that it could “only appeal such an unjust decision.”

Chairman and CEO Jacques Gounon, stated: “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.”

But P&O Ferries said that the decision by the CMA “is in the interests of fair competition and the long-term interests of freight customers who otherwise might have been faced with a dominant Eurotunnel in the cross-Channel market. MyFerryLink has gained a large share of the market by selling its services at below cost which is unsustainable,” it said.

Another rival cross-Channel ferry operator, DFDS also welcomed the move. CEO Niels Smedegaard said: “We can now start to carry out our plans for the future. For the sake of all stakeholders, we hope the decision will be implemented as swiftly as possible.”

DFDS pointed out that there are still a number of steps before the case is finally resolved. There is a four week period for lodging appeals to the Competition Appeal Tribunal (CAT) on the issues addressed in the decision (jurisdiction and material change of circumstance) and the CMA must issue an implementation order for the decision to become effective. There will be a four week consultation period from the issue of a draft order and a six month implementation period for closing down MyFerryLink, all of which could be affected in the event of any appeals.
DFDS estimates that the implementation period for closing down the ferry activities will expire in the first quarter of 2015.


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