Eurotunnel considering quick exit following DFDS defeat
The British Competition and Markets Authority (CMA) confirmed on Thursday that Eurotunnel's ferry operator MyFerryLink is barred from operating ferry activities out of the Port of Dover on the English Channel. In a statement published late on Thursday, Eurotunnel indicates that the battle against DFDS seems lost and that the British decision will have a crucial impact on the coming negotiations for MyFerryLink's contracts next year.
Groupe Eurotunnel has appealed the British decision, but after several hearings on the matter, the British Competition and Markets Authority has issued its final decision.
"The remedies will not come into force until after judgment in the ongoing appeal is given. The next event in the appeal is a hearing scheduled for 24 and 25 November 2014," said DFDS in a press release late on Thursday.
DFDS wins Battle on the Channel
Eurotunnel said on Thursday that the British Competition and Markets Authority has rejected all observations presented by the company, and that the decision, according to Eurotunnel, will prevent MyFerryLink from continuing its operations under ideal conditions while awaiting the final decision on November 24th and 25th.
"This position confirms in Groupe Eurotunnel's opinion the unalterable determination of the CMA to bring to an end the activities of MyFerryLink," says Eurotunnel in the statement.
Assuming that the Competition Appeal Tribunal (CAT) merely confirms the CMA decision, as it did in December, Groupe Eurotunnel will have to reflect on whether the company can continue to support the activity:
"The order published today could weigh heavily on the forthcoming annual contract negotiations between MyFerryLink and the major cross-Channel freight transporters," says Eurotunnel, thus indicating that the company will not claim its right to continue its operations for six months, as a definitive ban would otherwise allow for.
DFDS competitor lost EUR 14 million in 1st half of 2014
Eurotunnel bought its way into the route in 2012 through the acquisition of three ferries from bankrupt SeaFrance. According to the British authorities, the French company now controls more than 50 percent of the market on the English Channel due to the company's tunnel activities.
The French tunnel operator maintains that its purchase of the bankrupt SeaFrance ferries through an open auction and the operation of these alongside the tunnel are completely legitimate.
"Groupe Eurotunnel reaffirms that acquiring assets, in an open auction through the Paris Commercial Court, can in no way be compared to the purchase of the activities of SeaFrance, as the CMA interprets it. Entrusting the operation of the ferries to maritime workers, for all that many had previously worked for SeaFrance, regrouped into an independent workers co-operative (SCOP), is neither illogical nor reprehensible," says Eurotunnel.
DFDS and Eurotunnel - through MyFerryLink - have since then been through a fierce price war resulting in major losses for both parties, and British P&O has also been affected.
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