Eurotunnel Dover-Calais MyFerryLink operation 'must cease'

Eurotunnel's ferry services began operating in August 2012 under the MyFerryLink name

Cross-Channel rail operator Eurotunnel has been banned from operating a ferry service it started two years ago.

The Competition and Markets Authority (CMA) has confirmed an earlier decision that the company should not run its MyFerryLink service from Dover.

Spokesman Alasdair Smith said it was the CMA's view that current competition on the ferry route was unsustainable.

MyFerryLink said it disagreed with the CMA and would appeal. Sailings would continue beyond summer, it added.

'Potential job losses'

Mr Smith said the CMA had jurisdiction over Eurotunnel's move to buy three ferries that had belonged to the former SeaFrance operation.

He said two other Dover-Calais operators were making losses and any exit of a competitor would leave My FerryLink as one of only two ferry operators, in addition to the competing rail link.

He said Eurotunnel's purchase of the ferries meant it had more than half the market and its share could still rise.

It would be better for passengers and freight operators to have three competing operators which would be Eurotunnel's rail link and two independent ferry operators, he said.

But he added the CMA would not stop Eurotunnel finding an independent purchaser to buy and run its ferry service.

"We are conscious of the potential effect of our decision on the jobs of the MyFerryLink workers," he said. "However, there will also be job losses if MyFerryLink remains on the route and another operator leaves."

Mr Smith, CMA Panel deputy chairman, said Eurotunnel would have six months to stop ferries in order to reduce disruption and uncertainty for customers.

'Bad for consumers'

MyFerryLink said it disagreed with the CMA on a number of points, including that it did not consider the CMA had jurisdiction to review the transaction as a matter of UK merger law.

It said the CMA's decision would reduce choice and was bad for consumers, competition and all involved in cross-Channel operations - including staff, customers and Dover and Calais.

"Given that any appeal is unlikely to be finally determined until much later this year at the earliest, we would like to reassure our loyal customers that we will continue to operate our full schedule throughout the summer season and beyond," the statement added.

Chairman and CEO of Groupe Eurotunnel, Jacques Gounon, said the CMA's analysis was the opposite of that made by its French counterpart.

The company had asked the CMA to seek a convergence of views through the European Commission, he said.

Removing one competitor effectively created a duopoly in the maritime sector which would bring increased prices for consumers and a reduction in revenues for the ports of Dover and Calais, he added.

"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," he said.

'Loyal employees'

Rival firms P&O Ferries and DFDS Seaways both welcomed the decision.

P&O said it believed the move was "in the interests of fair competition and the long-term interests of consumers and 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.

DFDS said: "Today's final report from the CMA is good news for DFDS Seaways and our 1,300 loyal employees providing ferry services on the Channel. As a result, we can now start to finalise our plans for the future."

The CMA said MyFerryLink could end up as one of only two ferry operators in addition to the competing rail link