No price rises or loss of choice from Co-op merger, says Thomas Cook boss

July 22, 2011, 08:30

Thomas Cook boss Manny Fontenla-Novoa insists the 1,200-plus chain of shops formed by the merger with the Co-operative Travel will sell at least as many tour operators as today and says prices won’t rise.

Fontenla-Novoa told Travel Weekly: “The range of tour operators we support will remain unaffected. I don’t see the merger affecting any tour operators.”

The Thomas Cook chief executive added: “Will there be price rises? Categorically not. We are not geared up to have local pricing. The biggest driver of price is the internet.”

Thomas Cook retail, The Co-operative Travel and Midlands Co-operative will merge from October after the Competition Commission gave a provisional go-ahead to a deal announced in October 2010. The Commission will issue a final ruling next month.

As part of its inquiry, the Commission considered whether the merged group might favour Thomas Cook holidays and “foreclose” on other tour operators. It concluded: “The most likely outcome would be for joint venture stories to favour sales of Thomas Cook . . . to the same or lesser extent than Thomas Cook’s own stores currently do.”

It added: “If foreclosure was significantly to affect any tour operators, the number of firms would be small”.

The Commission also considered pricing, noting it “cannot rule out the possibility of some price rises (via reductions in discounts) in certain local areas”. However, it concluded: “Any isolated price effects . . . would most likely be small, sporadic and eroded over time.”

Fontenla-Novoa said he was delighted with the findings. “I’m impressed with the quality and thoroughness of the Competition Commission. We felt we had a very strong case, but feared there might be some remedies,” he said.

“The Thomas Cook/Co-operative proposal is a retail proposal. We need to be able to offer a retail proposal to customers. We need the right quality and value. That is the critical test.”

He added: “We sell more tour operators at Thomas Cook since our merger with MyTravel than we did before.”

Cook Co-op merger: Key moments

	October 2011: The merger is announced Thomas Cook and Co-operative retail stores to merge Critics ‘don’t understand the numbers’ Greenacre apologises to staff for merger shock Deal ‘does not signal decline of independents’ – McEwan Retailer to continue supporting indie operators
	February 2011: Fast-track bid backfires Cook poised to demand referral to Competition Commission Cook-Co-op demands fast-track on merger referral Bid for fast-track ruling could cause further delay
	May 2011: Body reveals scope of review Commission identifies Thomas Cook-Co-op merger issues Aito agents: We’ll switch-sell if Co-op merger is agreed
	June 2011: Manny defends deal at ITT Conference Merger makes no sense, says Blastland Cook boss insists ‘the numbers work’ in Co-op merger UK consolidation over, say big two – we’re going global