| Journal: TWUK | Section: |
| Title: | Issue Date: 14/08/00 |
| Author: | Page Number: 4 |
| Copyright: Other |
Directional strategies
Government decision endorses sales tactic
THE Government’s action on transparency has given operators the green light to directionally sell, according to independent retailers and suppliers.The Competition Commission’s recommendations in 1997, then known as the Monopolies and Mergers Commission, were intended to force greater transparency on the ownership links between operators and agencies.
But the recommendations also gave the all clear on directional selling, while consumers had to wait until now for the new rules on transparency to come into force.
The MMC report on Foreign Package Holidays stated: “We have seen no persuasive evidence that such effects (of directional selling) have led to a fall in the number of competitors in the trade, to higher prices for foreign package holidays or to significantly less choice of such holidays, and hence to less value for money for consumers.”
The report went on: “We find that directional selling, as we have defined it, does not and may not be expected to operate against the public interest.”
Recent unofficial retail statistics found 70% of Going Places’ inclusive tour sales are for parent Airtours; Thomson accounts for some 63% of Lunn Poly’s business and JMC is 60% of Thomas Cook’s sales (Travel Weekly July 31).
Leisure Estates International chairman John Neilson, formerly of Neilson which was sold to Thomas Cook, said: “Since the MMC report was published, the vertically integrated companies openly refer to ‘directional selling’ and now conduct this policy far more aggressively than when they thought they might arise the concern of the Office of Fair Trading.”
Open season: agencies have had an all clear on directional sales