DSB suspected of German price deal

Reports of possible price-fixing schemes involving foreign train tickets in Denmark has led the Danish Competition Authority to launch an investigation of the close partnership between DSB and German railway operator Deutsche Bahn (DB).

Foreign train ticket sales are a veritable cash cow for DSB, which has no real competitor on the market. The lack of competition is due at least partly to the fact that Deutsche Bahn does not advertise its bargain ticket prices in Denmark, even though these tickets often sell 30-40 percent cheaper than the same tickets at DSB and are readily available in Denmark.

According to Niels Lund, director of DB's office in Copenhagen, Deutsche Bahn has made an agreement with DSB not to market their lower prices in the country. And Lund's claim has caught the attention of the Danish Competition Authority.

"We plan to investigate this matter with a view to fighting out if DSB is actively prohibiting sales from its competitor," said Competition Authority spokesman Niels Rytter.

"Until now, we haven't prioritized these kinds of trips very highly, because there aren't many people who travel long distances by train. But this could be a good opportunity to closer at that area," Rytter said.

Niels Rytter said it was unrealistic to expect uniform pricing on train tickets, because the entire market is affected by public subsidies - a factor that also makes competition generally difficult.

Niels Lund offered another explanation of Deutsche Bahn's lack of advertising presence in Denmark.

"There is a framework agreement governing sale and distribution between the German railways and DSB. DSB is the official distributor in Denmark, so it's they who hold the marketing rights in Denmark. Sometimes you have to consider the market you're on. And we do so by refraining from advertising in Denmark," Lund told daily newspaper Jyllands-Posten.

DSB sales director Bjørn Wahlsten has categorically denied reports of any territorial marketing agreement between DSB and Deutsche Bahn.

"If they want to market themselves, they're welcome to do so," said Wahlsten.

Jyllands-Posten checked the price for a train ticket from Århus to Munich, and found that DSB's tickets were about 40 percent more expensive than DB. DSB's prices run between seven and 31 percent higher than state railway operators in Norway and Sweden for Denmark and northward.

DSB expects international ticket sales to generate DKK 225 million in revenues this year.