Thomas Veckler has been in the leading group all the way and four kliometres from the finish of the 196.5km stage in Perpignan, he broke clear to ensure the first victory for the Bbox Bouygues Telecom team.
Cavendish, who started the day 60th after two stage wins, fought his way up to the leaders and made a dash for the line but was just beaten by Katusha's Mikhail Ignatiev, a late replacement for Gert Steegmans who had won the final stage of last year's tour in Paris.
Lance Armstrong finished in 41st place and is the joint race leader whilst Cavendish retains the Green Jersey. He has 96 points compared to Thor Hushovd's 70.