Channel routes merge
Page 10
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by Ian Wylie • P&O and Stena Line will merge their cross-Channel ferry services next Tuesday (10 March) after their joint venture received final Government approval last week.
The joint P&O/Stena Line operation is bound to heighten hauliers' fears of another round of rate rises.
Trade and Industry Secretary Margaret Beckett accepted a recommendation by the Monopolies and Mergers Commission (MMC) last November that the deal should be allowed to go through, if the ferry companies gave undertakings to protect the public interest.
After three months of discussions P&O, Stena Line and the Office of Fair Trading (OFT) have hammered out an agreement on a price cap on tourist traffic—but it will not apply to freight. Beckett has apparently accepted the MMC's conclusion that crossChannel com petition in freight services is greater than in passenger traffic.
International operators fear the merger could increase cross-Channel rates and lead to a reduction in crossings: they might take some heart from the undertaking which requires P&O Stena Line to warn the OFT in advance of any permanent reduction in the number of vessels which it intends to operate on the Dover-Calais or NewhavenDieppe routes.
But the ferry companies are making no promises about rates.
P&O Stena Line will offer a good-value service, says spokesman Peter Smith, but he adds: "We cannot give any binding or firm commitments on rates at this stage."
P&O angered hauliers last November by announcing a rise in freight fares— the first increase in four years—within hours of receiving the green light from the MMC on its merger with Stena.
Since 1 January hauliers have faced rises of up to £16.50 per vehicle.
Eurotunnel, which last month published results showing its first operating profit, also announced plans in January to raise its prices.