Ferry routes sale set for Competition Commission probe

image captionStena completed the purchase of the two routes to Belfast from Liverpool and Heysham in December

Stena Line's acquisition of two Irish Sea ferry services has been referred to the Competition Commission by the Office of Fair Trading (OFT).

Stena completed the purchase of the two routes to Belfast from Liverpool and Heysham in December.

The company said the move would create 195 shore-based jobs and 250 sea-based posts.

The two routes were previously operated by Danish shipping company DFDS.

Stena announced that it was closing its competing Fleetwood-Larne route the following day.

Irish Sea area director Michael McGrath said at the time that the decision to close the Larne to Fleetwood route was unconnected to the DFDS purchase.

"The decision to close Larne to Fleetwood was taken some time ago on the basis of the current and projected performance of the route, and before the opportunity arose to buy these other routes," he explained.

In considering the acquisition the OFT said it had looked at whether Stena would have closed the Fleetwood-Larne route even if the merger had not been in progress.

"If so, then the closure and not the merger may be the reason for the loss of any competition between the parties," it said.

'Competition concerns'

"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."

The OFT examined how the acquisition would have proceeded if Stena's Fleetwood-Larne service had continued to operate.

It came to the conclusion that the acquisition may result in "a substantial lessening of competition in the supply of ferry services for freight from the north-west of England to Northern Ireland".

In light of this the OFT referred the merger to the Competition Commission for a more detailed investigation.

Amelia Fletcher, OFT Chief Economist, said it was not possible for the OFT to be confident that the closure of Fleetwood-Larne could be separated from the merger.

"Prior to its closure, Stena's Fleetwood-Larne service was competing head-to-head with the routes that Stena has now acquired and customers were benefiting from that competition," she said.

"The Competition Commission now has the remit to investigate the entire transaction to establish whether there are competition concerns arising from the merger, and if so what remedies may be appropriate."

The Competition Commission is expected to report by the end of July.

The Irish Competition Authority is also still investigating the merger.

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