Eurotunnel’s takeover of former cross channel ferry operator SeaFrance has been referred to regulators over competition concerns.
Making the referral the Competition Commission, the office of Fair Trading said there were “concerns the merger could substantially reduce competition in the provision of cross channel transport services”.
The OFT said: “For both passenger and freight customers, the OFT is concerned that prices may increase as a result of this deal.
“Given the realistic prospect of this merger resulting in a substantial lessening of competition, the OFT considers it appropriate to refer the merger to the Competition Commission for an in-depth review.”
OFT chief economist and decision maker on the case Amelia Fletcher said: “Having efficient and cost-effective transport links between the UK and Continental Europe for passengers and business customers is clearly important.
“We are concerned that the merger could further strengthen Eurotunnel’s position in the market for cross channel transport and prices could go up as a result.
“As such, we believe it is appropriate that the Competition Commission reviews this merger in detail to ensure that the interests of consumers and industry are protected.”
The acquisition by Eurotunnel of three SeaFrance ferries and other assets after the ferry company went into liquidation brought a furious reaction from Dover-Calais operator P&O Ferries.
The OFT said today that there is some evidence that an alternative buyer would have acquired the business, had Eurotunnel not done so, and it was concerned about the loss of competition as compared with this “plausible scenario”.
“The evidence gathered by the OFT indicates that, prior to SeaFrance’s liquidation, it was a close competitor to Eurotunnel.
“Although some competitors remain after the merger, the evidence available to the OFT indicates that only P&O will provide a strong competitive constraint to Eurotunnel for some customers,” the OFT said.
Eurotunnel recommenced operations of the ex-SeaFrance vessels in August, operated primarily by former employees, on the Dover to Calais route under a new brand called MyFerryLink.