Blog
Unit 3 Micro: Ban on Eurotunnel ferry service confirmed by CMA
30th May 2014
An important judgement from the newly established Competition and Markets Authority (CMA). They believe that competition is best served by having three major cross-channel service operators - namely EuroTunnel (rail) and two ferry operators.The CMA has ruled against EuroTunnel being able to cross-subsidise the loss-making MyFerryLink on the Dover to Calais service because in doing so, it is likely to lead to the market exit of a rival provider and ultimately cause higher prices for consumers.
This paragraph is telling!
"The interest of cross-Channel customers, both passengers and freight, will not be well served if Eurotunnel ends up as one of only two ferry operators in addition to owning the competing rail link. Eurotunnel’s purchase of ferries means it now has over half the market and its share will rise further if competitors exit."
The two major competitors to EuroTunnel are P&O Ferries and Denmark’s DFDS
Geoff Riley
Geoff Riley FRSA has been teaching Economics for over thirty years. He has over twenty years experience as Head of Economics at leading schools. He writes extensively and is a contributor and presenter on CPD conferences in the UK and overseas.