OFT refers Irish Sea ferries deal to Competition Commission

The OFT has referred the sale of two Irish sea ferry routes to by Danish operator DFDS to Stena Line to the Competition Commission.

The routes were sold as part of DFDS’s planned withdrawal of services from North West ports to Ireland. It sold the assets and vessels on both the Liverpool-Belfast and Heysham-Belfast routes on December 1 to Stena.

Last month, DFDS subsequently announced that it was to close two lossmaking routes, Liverpool-Dublin and Heysham-Dublin. The firm’s CEO Niels Smedgaard said that it had lost €30m on its Irish Sea routes during the previous two years.

Following its acquisition of the Belfast routes from DFDS, Stena Line subsequently announced it was closing its Fleetwood-Larne line.

The OFT has said that in assessing the acquisition, it considered whether Stena would have exited the Fleetwood-Larne route regardless of the merger.

If so, it argued that the closure and not the merger may be the reason for the loss of any competition between the parties. However the evidence available to the OFT was not compelling enough to dismiss its concerns that the closure of the route may have been influenced by the merger.

It has therefore assessed the acquisition as if Stena’s Fleetwood-Larne was still operating and concluded that the deal created a realistic prospect for “a substantial lessening of competition in the supply of ferry services for freight” between the North West and Northern Ireland.

The Competition Commission now has a remit to investigate the entire transaction to judge whether there are competition issues arising from the deal.