By
Rebecca Gibson |
The UK Office of Fair Trading (OFT) announced on 29 October that it had referred Eurotunnel’s acquisition of three vessels from former ferry operator SeaFrance to the Competition Commission (CC), amid concerns about the reduction of competition and the increase of fares in the cross-channel transport market.
Eurotunnel provides rail transport services to passengers and freight customers through the operation of the Channel Tunnel, runs the Le Shuttle car carrier service and acquired three ferries after the liquidation of its former close competitor SeaFrance in January 2012.
The three vessels recommenced service on the Dover to Calais route in August 2012 and now operate under the MyFerryLink brand, which is primarily run by former SeaFrance employees.
While Eurotunnel’s acquisition of a further cross-channel service replaces the passenger capacity lost after SeaFrance’s liquidation, evidence collated by the OFT indicates that the merger has greatly reduced competition in the travel market. Although some companies such as P&O will retain their competitive position, the OFT is concerned that Eurotunnel’s position in the cross-channel market has been strengthened, which could increase fares for passengers and freight customers.
Amelia Fletcher, OFT chief economist and decision maker in this case, said: “Having efficient and cost-effective transport links between the UK and Continental Europe for passengers and business customers is clearly important. We are concerned that the merger could further strengthen Eurotunnel's position in the market for cross-channel transport and prices could go up as a result. As such, we believe it is appropriate that the Competition Commission reviews this merger in detail to ensure that the interests of consumers and industry are protected.”
The CC is expected to report its findings by 14 April 2013.