Thomas Cook and Co-Op merger faces OFT review
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Plans by Thomas Cook and the Co-Operative Group to merge their high street travel store operations face an investigation by the Office of Fair Trading (OFT).
The European Commission (EC) initially reviewed the proposed merger but as the main impact is expected to only affect the UK market, it has passed the job to the OFT. The merger will create the largest high street travel retail network with an estimated 1, 204 stores.
The joint venture will retain the separate brands and also encompasses Midlands Co-Operative. The initiative should make savings for the firms but job losses are expected.
Thomas Cook will hold 70% of the joint venture and Co-Op Travel 30%.
The OFT has 45 working days from receiving the EC notification to investigate the proposed merger.
The OFT originally requested that it takes over the investigation from the EC and issued an invitation to comment notice to interested parties by 19 November.
It says that it received a number of responses from both package holiday companies and travel agencies and while “the number of direct responses” was relatively small, “nevertheless it has no reason to believe that these may not be representative of wider concerns.” These included competition concerns at a national, regional and local level.
A spokesman for Thomas Cook says: “We will continue to work closely with the OFT to obtain a rapid clearance.”
Thomas Cook’s online operation is not part of the merger plan.
The company has just launched its January bookings campaign featuring Jamie and Louise Redknapp.
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 here for more information on this YouGov market report
