At least nine tour operators have raised objections to the retail merger of Thomas Cook, The Co-operative Travel and the Midlands Co-operative in submissions to the Competition Commission.
The companies warn of fewer travel agents on UK high streets, the loss of charter flights from some regional airports and reduced choice for holidaymakers.
Only Virgin Holidays and two agencies, Kiwi Travel and Saturn Travel, have publicly put their names to the objections, but all argue the merger would give Thomas Cook the power to cut other tour operators out of the high street.
Virgin Holidays argues the proposed merger would “significantly affect competition in the markets for oceanic cruises sold in the UK and package holidays sold through high-street agents in certain regions . . . because Thomas Cook will be able to foreclose a large part of the market to other tour operators”.
The company suggests: “The merged entity will have the ability and incentive to engage in aggressive directional selling.” It adds: “This concern is exacerbated by the fact that over recent years Thomas Cook has moved away from . . . offering the best package to suit the customer’s requirements . . . towards a strategy focussed on directional selling.”
A second tour operator has told the Competition Commission: “A merger of these companies would result in a severe lack of opportunities for an independent tour operator . . . We speak from experience having seen the result of the merger between Thomas Cook and MyTravel in 2007.”
A third company warns: “The merger could substantially remove the national estate of trusted independent agents as the merged Co-op shops would be Thomas Cook shops in disguise.”
A fourth tour operator suggests: “The inability to sell through The Co-operative Group and Midlands Co-operative could result in the withdrawal of some charter operations from airports.” Another warns: “It’s likely there will be a further round of closures of retail travel agencies where there are Co-op and Thomas Cook stores in close proximity.”
The objectors argue internet sales alone provide insufficient alternative for consumers.
Thomas Cook and its Co-op merger partners have yet to respond in public to the objections. The Competition Commission will make a decision by August 16. It is expected to allow the merger to go ahead, but to order a divestment of parts of the combined retail estate.
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