Eurotunnel sells Dover-to-Calais ferry service to Danish rival DFDS after pressure from competition watchdog

01.07.2015

 

· Eurotunnel disposes of MyFerryLink to DFDS for an undisclosed sum

· The French group said it would have preferred to sell the business to SCOP SeaFrance, the workers co-operative company operating the route

Eurotunnel has found a buyer for its MyFerryLink cross channel service from Dover to Calais after it was forced to put it up for sale by the UK competition authorities.

The French company said it was selling its passenger ferries Rodin and Berlioz to competitor DFDS for an undisclosed sum after buying them from SeaFrance for more than £50million in 2012.

The sale comes after Eurotunnel, which also owns a freight ship - Nord Pas de Calais - failed to overturn a ruling by the UK's Competition and Market Authority, which found that the company should not own the business as its share of the cross-Channel market was too big.

Last year the CMA decided that the deal would give Eurotunnel more than half of the cross-Channel market. Eurotunnel successfully challenged the ruling last month, but it still decided to sell the ferries as the CMA said it would try to take the case to the Supreme Court.

"The Eurotunnel group has decided to sell its maritime activity, MyFerryLink, as the conditions necessary to develop freely did not exist," it said today.

The group also said it would have preferred to sell the business to SCOP SeaFrance, the workers co-operative company operating the route on its behalf.

Eurotunnel, which employs 3,700 people in the UK and France, asked for a competition ruling to be lifted in relation to the freight ship Nord Pas de Calais so that it can continue operating.

The Channel Tunnel operator bought the ferries from SeaFrance three years ago after the French company went under, in the hope of branching out into maritime travel.

Eurotunnel, which holds a concession to run the Channel Tunnel rail link until 2086, reported a near 90 per cent leap in profits earlier this year thanks to holidaymakers travelling between France and the UK and the popularity of Eurostar trains.

But its MyFerryLink service, which employs 600 staff, of which 100 based at Dover and competes with P&O and DFDS Seaways, has not turned a profit since it began operations in August 2012.

The CMA's chairman of the Eurotunnel inquiry group, Alasdair Smith, said in January: "Our first priority remains to protect the interests of passengers and freight customers.

"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.

"Having one of only two ferry operators owned by the competing rail link would be bad for customers."