I remember explaining to the Monopolies and Mergers Commission exactly what harm directional selling could do to consumer interests.
The Association of Independent Tour Operators explained at length in its submission to the MMC that, unless the vertically integrated market leaders were forced to sell their chains of retail travel agencies, there would be no benefits for the consumer.
The irony is the MMC found retail chains were guilty of directional selling, yet felt no action was necessary to remedy this state of affairs. How they could ever have thought they could leave the industry leaders to their own devices defeats me.
The trouble is that those at the MMC who produced the report did not really understand the industry. They can be excused for not being able to cope with the very complicated issues but what cannot be excused is the gross delay on the part of the Office of Trading in announcing how it intends to deal with the transparency issue.
It is now over a year since we were told the OFT would insist the tied retail chains would be forced to make their ownership links quite clear.
In the last year, taking advantage of the confused situation, the vertically integrated companies have expanded their retail interests so it is now virtually impossible for the OFT to implement any sort of policy on transparency.
As reported in last week’s Travel Weekly, the newly acquired Travelworld retail chain has done Airtours proud, boosting the sales of Airtours products at the expense of just about everything else. It’s good for Airtours, but is it good for the consumer?
Well, someone in Government should have the guts to say enough is enough and either threaten the market leaders with a sell-off of their retail distribution arms or insist that all their various brands are renamed Airtours, Thomson, First Choice and Thomas Cook and all the retail shops are called by the same name. Why, for instance, should the Magic of Italy not now be called Thomson’s Magic of Italy or Sunworld be called Thomas Cook’s Sunworld or Tradewinds be renamed Airtours’ Tradewinds?
If Airtours’ retail chain Travelworld is so unashamedly pushing Airtours products, then why should the branches not be renamed Airtours? Why should Going Places so obviously pushing Airtours, not also be renamed Airtours?
The vertically integrated companies have taken every possible opportunity to advance their market positions. Well, if the OFT feels all is fair then it should be ashamed of itself.
Over the years I have been writing this column I have been called many things and I know many in the City and others within the large companies themselves have wanted me silenced. No-one likes to hear the truth. They love branding me a whinger but you want to hear them howl when their precious interests are put at risk. I’m afraid I know the industry too well to take fright.
Unfortunately for the vertically integrated, public opinion is not swinging their way. The independents are still there and the press is constantly telling the public they will not be offered a choice when they shop at a multiple. The Government should do the decent thing and formally condemn what is happening in the travel industry.