ShippingWatch

Competition office wants to see DFDS' agreement with forwarders

In recent months, the British Office of Fair Trading (OFT) has been asking questions about the agreement DFDS made earlier this year with Swedish Ntex, DFDS CEO Niels Smedegaard confirms to ShippingWatch.

British competitive authorities have in recent months been putting several questions to DFDS in relation to the shipping company's agreement earlier this year with Swedish forwarding company Ntex concerning trailer transport between Gothenburg and Immingham, DFDS CEO Niels Smedegaard tells ShippingWatch following the recent discovery that the British Office of Fair Trading is currently investigating the freight agreement, asking questions about the contents of the agreement.

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Ntex was behind the competing shipping company North Sea RoRo, which shut down following the agreement between DFDS and Ntex after having sailed in direct competition with DFDS since January 2012.

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"We've been asked a series of questions by the OFT in May and early June, which we've answered. This is not a merger. We've had a better frequency, and Ntex, who was a shareholder in North Sea RoRo, decided to switch to us, and they were then forced to shut down because their biggest customer decided to use a different model," says Niels Smedegaard.

In a note dated June 28th, the OFT, according to Ritzau Finans, writes that the office is considering whether this agreement has resulted in a merger that falls under the Entreprise Act 2002, and if it does, whether this has resulted in or is expected to result in a significant reduction of competition in any market or markets for goods and services in Great Britain.

"We assume that the Office of Fair Trading will conclude that this agreement doesn't constitute a merger. I consider this a normal procedure that happens when a market changes. We consider the Ntex agreement a regular customer agreement," says Niels Smedegaard, who is not familiar with any case of the British competitive authority having received complaints in the wake of DFDS now operating alone again on the key route between Gothenburg and England, traditionally one of the carrier's most lucrative routes.

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"Of course we've consulted attorneys during this process, when we occupy the position we do on this market, in order to ensure that we're not doing anything we can't or aren't allowed to do," says Niels Smedegaard, stressing that it would have been a different matter if DFDS had tried to puchase North Sea RoRo.

Among other things, the Office of Fair Trading has asked questions about the contract DFDS has signed with Swedish Ntex.

DFDS is already familiar with the British competitive authority, though in a different light. Earlier this year, the shipping company filed a joint complaint together with P&O concerning Eurotunnel's new ferry activities on the English Channel - where the authorities ruled in favor of DFDS and P&O.

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