P&O and Eurotunnel raided in price-fixing investigation

The offices of P&O and Eurotunnel were raided yesterday by officials from the European Commission over suspected collusion to fix the cross-Channel rail and sea transport market.

The Commission's investigators were accompanied by inspectors from the Office of Fair Trading looking for evidence of price-fixing and market-sharing agreements among cross-Channel transport services operators. Ferry services in the Irish Sea are also thought to be under examination. The offices of Stena, the Swedish company, were raided in Gothenburg as part of the inquiry.

The Commission said: "The purpose of these inspections is to ascertain whether there is evidence of suspected cartel agreement and related illegal practices concerning fixing of prices and trade conditions for cross-Channel transport services. The purpose is also to ascertain whether there is evidence of suspected market sharing agreements in relation to the provision of ferry services to and from the UK."

It is thought that Brussels is primarily interested in the market for "roll-on, roll-off" services across the channel and the freight market. Ferries tend not to take passengers on foot, so do not compete in this market with Eurotunnel, which owns the tunnel infrastructure and provides car and truck carrying shuttles.

Separately, the Commission raided the offices of ferry companies operating in the Baltic Sea, providing services between Germany, Denmark and Sweden. This inquiry is simultaneous but, so far, independent of the cross-Channel investigation.

On the key Dover to Calais route, P&O has 25 per cent of the market, while Eurotunnel has 50 per cent and three smaller ferry operators share the remainder.

P&O's offices in Dover and London were raided yesterday morning. A small number of documents were taken away by officials. Eurotunnel's offices at Folkestone were also visited.

Both companies stressed they are co-operating with the Commission. In the past, companies operating across the Channel have complained of over-capacity and only last month P&O warned that ferry prices have "fallen significantly this year". When the Channel Tunnel opened in 1995, providing rail competition to ferry operators, capacity on the cross-Channel route was immediately doubled.

Surprise inspections are a preliminary step in investigations into suspected cartels. There is no deadline to complete cartel inquiries.

The Commission said: "Their [investigations] duration depends on ... the complexity of each case, the exercise of the right of defence and by the respect of the European Commission's consultation and other procedures."