[Article] Watchdog warns over ferry route deal

Victor

Watchdog warns over ferry route deal
From:ireland.com
Friday, 28th November, 2003

Ferry operator Stena has been told its plans to run the Liverpool-Dublin route will cut competition and may spark price increases.

A provisional ruling by the Competition Commission said the deal to take on the route from P&O would make Stena "significantly larger" than rivals operating in the Irish Sea.

This could spell bad news for freight firms and passengers on the Dublin-Liverpool route with Stena able to exercise market power and introduce increases in prices, the commission said.

The provisional ruling stated it could also deter Stena from cutting fares on its other routes such as Dublin-Holyhead to attract traffic from remaining rivals Irish Ferries and Norse Merchant Ferries.

Other ferry companies would be put off entering the market by the deal. which meant long-term competition would suffer, the Competition Commission added.

Stena operated four routes across the Irish Sea at the time of the May deal with P&O to take over five ferries and operate the Liverpool-Dublin and Fleetwood-Larne routes.

The Competition Commission, which spent three months studying the tie-up after it was referred by the Office of Fair Trading in August, said control of the Fleetwood-Larne route by Stena would not result in a substantial lessening of competition.

Professor Paul Geroski, chairman of the Competition Commission inquiry, stressed the findings were provisional and the ferry companies had 21 days to state their cases before a final decision is made.

Commenting on the ruling, P&O said it would be reviewing the summary and continuing its discussions with the Competition Commission.