Thomas Cook and Co-op apply for fast-track referral to CC
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Thomas Cook and the Co-operative Group have made an application to the Competition Commission (CC) to fast-track an anti-trust investigation into the merger of the two businesses.
Thomas Cook and The Co-op are attempting to merge their travel operations to form the largest high street travel operator in the UK, with over 1,200 stores.
The two companies are looking for the CC to review the case immediately, rather than wait three weeks for the investigation to be referred by the Office of Fair Trading (OFT).
The merger is currently being investigated by the OFT, which has told the companies it believes the tie-up significantly threatens the competition in supply of package holidays sold through UK retail travel agents.
Once referred, the CC will have six months to reach a decision as to whether the merger should go ahead.
Thomas Cook chief executive Manny Fontenla-Novoa says: “We continue to believe that there is compelling rationale for clearance, particularly when you consider previous decisions in our sector. We feel that proceeding straight to the Competition Commission should provide us with the right answer most quickly.”
Subject to approval, both travel brands will retain their branding but 70 outlets of Going Places, Thomas Cook’s subsidiary brand, will be rebranded under the Co-operative Travel brand.
Thomas Cook will hold 70% of the joint venutre and the Co-op Travel 30%.
The initiative is expected to make savings for the firms but it is likely both companies will incur job losses.
Thomas Cook’s online operation is not part of the merger plan.
YouGov Insight:
Holidaying
· Two thirds of consumers have taken short breaks in the UK over the past year.
· However, the recession and its aftermath have taken a heavy toll on short haul, short breaks. Just over one fifth of adults have taken a European short break over the past year.
· Those who have continued to take European short breaks are most likely to be young single men under 25: essentially, confident travelers who have been less affected by the recession than older consumers.
· 1 in 4 young men between the ages of 16 and 24 have taken short breaks in Europe in the last year. This is well above the average of 15% across all demographics.
· 1 in 4 YouGov respondents said that having friends or relative in the area had a bearing on the choice of destination for their last short break.
· Half of ABC1s said that they just don’t like lying on the beach, while only 37% of C2DEs feel the same.
Click herefor more information on this YouGov market report
