The OFT has announced it has made a fast-track reference to the Competition Commission on the proposed joint venture between Thomas Cook, the Cooperative Group and the Midlands Co-operative Society.
Sheldon Mills, OFT Director of Mergers, said: “Travel services such as package holidays represent a big area of spending for many UK consumers and this proposed joint venture brings together two of the largest high street travel agencies in the country.
“It is therefore important that the proposed joint venture is carefully considered to assess whether it will lead to a substantial loss of competition.
“Following discussions with the parties, we have decided that there is sufficient evidence to warrant a fast track reference to the Competition Commission for a detailed inquiry.”
The joint venture would bring together two of the three largest travel agents on the UK high street. The OFT said “it was concerned that, if the joint venture went ahead, it could significantly affect competition in the supply of travel services via retail travel agency outlets in the UK, which remain an important distribution channel, in particular for package holidays and other holiday products”.
The regulatory body also said it was concerned that independent tour operators may also lose access to distribution through Co-op stores.
The reference is the OFT’s first use of its fast track procedure, and follows a request made on February 14. The procedure provides merging parties, in cases which may raise complex issues or which clearly meet the threshold test for reference to the Competition Commission, with an opportunity to streamline Phase 1 of the merger process.