The Competition Commission has identified four ways in which the merger of Thomas Cook, The Co-operative Travel and Midlands Co-operative might reduce retail competition in the UK holiday market.
The commission said it will consider whether the deal could:
- Reduce competition in localities
- Reduce competition nationally
- Lead to agents “favouring” the sale of Thomas Cook holidays
- Limit the access of rival agents to Thomas Cook product
In a statement, the Competition Commission noted the merger – announced last October – would bring together two of the three largest travel agents on the UK high street and create a chain of 1,240 shops.
The commission said it will consider whether a reduction in the number of competing agencies in local areas “may allow the joint venture to increase prices . . . offer lower discounts . . . or in some way alter their offering to the detriment of customers”, and whether the joint venture “might have an incentive to allow greater local or regional variation of price and service quality”.
It will assess whether the joint venture might favour Thomas Cook’s own product, “by ceasing to sell some or all of other operators’ offerings or by focusing promotional and sales effort on Thomas Cook’s offerings”.
The commission will also consider whether Thomas Cook “may favour the joint venture . . . by ceasing to supply some or all of its offerings to third-party travel agents or worsening the terms on which they are supplied”.
Comments on the issues the Competition Commission has identified need to be submitted in writing by Friday May 13.
The commission is due to rule on the merger by August 16. If it decides the merger may result in “a substantial lessening of competition”, it will propose one or more remedies. These would most likely involve the divestment of parts of the combined retail estate.