The Office of Fair Trading should ensure competition on the high street is maintained when it investigates the retail merger of Thomas Cook and The Co-operative Travel.
The demand came from an outspoken critic of the deal, Page and Moy’s chief executive William Burton, who fears the deal will squeeze out independent operators from an important distribution channel.
He said the merger could create a dominant group on the high street that would be able to demand uneconomic terms from smaller suppliers which they could not accept.
Burton said he was not in principle against the merger, but called on the OFT, which began a 45-day inquiry last week, to insist on certain conditions.
“My personal view is that the commercial logic for them doing this merger is actually very strong. The real question is has the OFT or the government got to first put in constraints that will actually preserve competition in the market or will they just decide it’s too difficult and let it happen.
“Getting a fair outcome which preserves competition in the industry and allows an efficient retail structure to be in place is important for everybody.”
Burton has already submitted his views to the OFT suggesting a number of constraints, the most simple of which, he believes, would be to impose a target for the proportion of sales of third party product.
He is considering whether to send the OFT a further submission now the case has been referred to it. “At the moment we do distribute through the Co-op but I’m very concerned that if it becomes the big two it will be uneconomic for us to in the future.
“We have attempted to negotiate deals with the big two in the past but invariably the deals they have asked for made it uneconomic for us to distribute through them.
“We want to protect a degree of competition within the market for third party tour operators and there are a number of ways you can do that.
“You could cap the proportion of in-house sales that the two main distributors are able to sell. That would be a nice simple fix. It would be easy to measure and would have the desired effect.”
Burton said with the situation still unresolved Page & Moy, as well as other operators, has not been able to agree renewed commercial terms and he called for as speedy a resolution as posible.
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