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UK authorities fear unfair competition on the Channel

The British Competition Commission is critical towards the Eurotunnel purchase of three ferries from insolvent SeaFrance. According to the Commission, the purchase was made just to keep DFDS from purchasing the ferries. Too soon to comment, DFDS says.

The British Competition Commission is critical towards Eurotunnel’s purchase of three ferries from the insolvent SeaFrance. The purchase will increase the Eurotunnel market share on the English Channel and according to the Commission, the purchase was only made to keep DFDS from buying the ferries. In August, DFDS had to downgrade because of the increased level of cross-Channel competition. After much struggle and debate, Eurotunnel, the owner of the tunnel between Britain and France entered the ferry market. The DFDS August downgrade was USD 27 million EBITDA. However, the British competition authorities are critical towards the Eurotunnel entry on the market.

“"It would seem that Eurotunnel moved into the ferry business because it was concerned at the increased competition it would face if another operator bought the assets. "Given that the company already holds a market share of over 40 per cent, we’re concerned that customers could lose out from Eurotunnel increasing its share even further and being able to raise prices on the tunnel services,” Competition Commission Deputy Chairman, Alasdair Smith said.

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