More bad news for competition

And bad news for anybody who wants to support ethical businesses. Now the Co-op travel group will be dictated to by directors and senior managers more concerned with profits and shareholder dividends. So much for the various Co-op businesses being ultimately owned by the membership - they should now be forced to re-name all the outlets because it certainly will no longer be a co-operative.

SM

FYI: Not all cooperatives have signed up to this.

Yes, not all co-ops have signed up to this (mine hasn't for instance as far as I know because they don't run a travel business) but it looks as if all the co-op travel outlets/operations have or are committed to it in the near future (eg Midland/Mid-counties). Do you have any more info on co-op travel agents who aren't part of this 'merger'? They would be strong contenders for my business in the future if there are. I've tried avoiding as much as possible using the big high street TA/TOs for some time.

I would be interested in knowing about what consultation there was with members of the co-ops who own the travel agencies concerned. I suspect very little because the travel business side seems to be run on the basis of being standard trading companies that are wholly owned by the co-operative societies that set them up. So I suspect that the decisions have been made by exec members under delegated powers rather than by vote of the membership which is required when there are any changes to the constitution of the membership societies themselves.

SM

Midcounties have absolutely not signed up.

the version of Co-op Travel involved (I found 3 last week whilst looking for something) is the one with an admin HQ in Burslem, Stoke on Trent (but not for much longer) and is registered in Manchester.

And it could be worse for competition than lynwestie fears. They are pooling the retail shop businesses in a joint venture company but tour operations aren't mentioned - so will Co-op own brand tours still be sold or is that part of the business going to quietly disappear. And what of the Co-op's Freedom Travel Group which runs support and back office services for a large number of independant travel agents - will TC be so keen to keep them going?

On a more domestic matter -how are we supposed to organise the threads on this board if they keep doing things like this??!

There is also a teensy chance that anti-competion/anti-trust laws mean that they won't go through.

But it is very worrying that you could quite concievably go from a choice of 3-4 travel agents to two.

I was mooching on the net this morning looking for euro rates and spotted it...said it had gone on 35mins earlier.....I was shocked.....think the days of affordable foriegn holidays are fast fading away....tweetie

I don't think it will affect prices of holiday directly as it is mainly the high street travel agency businesses that are merging (+Freedom travel franchises + Coop home workers).

The rationale is that following the merger the COOP will sell a higher % of TC Group holidays. In return, the COOP gets access to better prices on TC group holidays which helps it compete with other channels (DIY, Indepedant agents etc) and give it's members a better deal.

In terms of competition, there is no reduction in number of tour operators, just the selling agencies on the high street, which as far as I am concerned is probably needed as with the dramatic increase in online bookings and DIY, there isn't enough volume to support 4-5 different businesses SELLING the same holidays on the high street.

The only indirect effect on holiday prices could be that as the COOP sells more TC group holidays, the number of TC late deals reduces as capacity is filled quicker... however, the flip side is that you would assume that Thomson/Olympic/Monarch/Jet2 Hols would have more deals as they lose market share?

Midland Counties co-op have confirmed that they are joining the merger.

Midland are joining. As I said before Midcounties are definitely NOT.

Cook-Co-op merger dealt a blow

Thomas Cook's planned retail merger with The Co-operative Travel received a setback today with the news that the Office of Fair Trading has asked for the go-ahead from the European Commission to look into the deal.

This means that approval for the merger will not come later this month, as the two parties hoped, and could be delayed until March next year.

The European Commission has until January 6 to decide whether to grant the OFT's request. If it does, the OFT will have up to 45 working days to decide whether to block the deal on competition grounds.

Thomas Cook Group, The Co-operative Group and Midlands Co-operative said they were working with the relevant authorities to achieve an expedited clearance for the joint venture.

Thomas Cook chief executive Manny Fontenla-Novoa said: "The joint venture is a clear demonstration of our commitment to the high street.

"We always knew that this request was a possibility and we will continue to work closely with the relevant authorities.

"We remain confident that the transaction will be cleared in due course."

With permission from Travelmole

Cook-Co-op merger to be delayed

Thomas Cook's retail merger with the Co-operative Group and Midlands Co-operative will be further delayed following today's announcement that they have asked for the matter to be referred to the Competition Commission (CC).

The CC could take six months or even longer to decide whether to allow the tie-up to go ahead.

The Office of Fair Trading has already spent six weeks examining the proposed merger, which will create the largest travel retail chain in the UK, but this morning the three parties said they had made an application to the OFT to fast-track the anti-trust approval process and proceed directly to the CC.

They clearly believe there was a real danger the OFT would have referred the merger to the CC next month following its own investigation and by requesting the matter to be referred directly the three parties are hoping to save some time.

In a statement released to the London Stock Exchange this morning, Thomas Cook chief executive Manny Fontenla-Novoa said: "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.

"Our view on the benefits of the transaction is unchanged and we remain fully committed to the merger. We will continue to work closely with the authorities to expedite clearance."

With permission from Travelmole

Cook/Co-op merger gets green light

Thomas Cook has been given the green light for its proposed merger with the Co-operative Group and the Midlands Co-operative Society.

The Competition Commission has provisionally concluded that the acquisition will not result in a substantial lessening of competition in any markets in the UK, in particular for customers buying package holidays from high street travel agents.

The joint venture would bring together two of the three largest travel agents on the UK high street. Thomas Cook currently has 780 stores, Co-op 360 and Midlands 100.

Laura Carstensen, Competition deputy chairman and chairman of the Inquiry Group, said: "We have particularly focused on the effect the joint venture will have on customers buying package holidays.

"We conducted a survey of customers in those areas most likely to be affected by the joint venture. Whilst the Internet is clearly a choice for many independent holidaymakers, the majority of these customers prefer to book package holidays through high street travel agents.

"Our analysis suggests that the extent to which travel agents respond competitively to nearby rival outlets, particularly through use of discounts, and their ability to ‘flex' prices at a local level, is quite limited.

"Our assessment of competition between travel agents at regional and national levels suggest that the joint venture's incentives to increase prices, or worsen other aspects of their retail offer, was likely to be even weaker than at a local level.

"We also looked at the potential effect of Co-op and Midlands outlets favouring Thomas Cook package holidays over those from other providers—or the possibility that the joint venture might block or hinder other travel agents from selling Thomas Cook holidays in order to drive customers to their own stores.

"We also found that the additional promotion of Thomas Cook package holidays would make a limited difference and that for the joint venture to seek to prevent other outlets from selling Thomas Cook holidays would not be rational, either financially or strategically.

"We think that the threat of the growth of rivals, entry by package holiday operators looking to ensure their route to market, and the increasing role of the Internet further reduce the scope for price rises over time.

Therefore, we think that customers are unlikely to suffer from significantly higher prices or reduced choice as a result of the joint venture."

The CC will publish its final report by August 16. Interested parties are invited to make their views known to the CC before August 11.

With permission from Travelmole

Commission delay on Thomas Cook merger

A final ruling on Thomas Cook's proposed merger with the Co-operative Group will be delayed until October, despite being given a provisional go-ahead by the Competition Commission last week.

The Commission has announced that the deadline for the investigation has been put back to October 11, from August 16.

However, the Commission gave provisional clearance for the deal, which will create a chain of more than 1,200 high street agents, on July 21 and is not expected to change that ruling. The deadline for final submissions on the merger remains August 11.

"We have to give this proper consideration," said a Competition Commission spokesman. "Five days [between the deadline for final submissions and a decision] wasn't very long to do anything but publish the final report. We have to run a fair process.

"The provisional findings were published quite late compared with the normal schedule. Taking time to consider responses is going to take us past the original deadline."

The Commission could issue the ruling ahead of the new deadline, as the eight-week extension is only an option.

A spokeswoman for Thomas Cook said she did not expect it to delay the completion of the deal, which is expected before the end of its current financial year, which ends in September.

With permission from Travelmole

It is my understanding that most of the Co-operative agencies will be rebranded as Going Places, as this name is still owned by TC.
This involves Midlands and Ilkeston Co-op as well as Co-operative travel and I believe Midcounties it is the Co-operative travel trading group members.

It may well affect choice and competition on the high street as far as the consumer is concerned, but to be fair the internet and unworkable profit margins are already doing that see Xcel, Goldtrail, Goldensun etc etc for the proof, and the fact that there are only 2 big operators any more.

No, the worry for me is that my Wife works for the Co-op and is facing losing her job as the first email received after the approval was that shops will shut and jobs will go, so we will be struggling financially. There are two Co-ops within 50 yds of each other, so its likely one will go.

In may ways its a case of what comes around goes around. Ilkeston Co-op were, I understand, the first agent to introduce discounting, if they hadnt and people paid the price asked there would be choice, competition and a far better travel industry, but as it did, perhaps its poetic justice that eventually they couldnt sustain it in the face of the ridiculous profit margins they had created and attempted to survive on in order to keep bookings.

Ilkeston Co-op were, I understand, the first agent to introduce discounting, if they hadnt and people paid the price asked there would be choice, competition and a far better travel industry,

I'm sorry to hear that your wife's job is under threat but surely the above is a contradictory statement? If every supplier charges the same price, as set by the manufacturer or TOs in this case, where is the choice and competition in that? Where is the incentive for a customer to choose one over another? Cartels where everybody agrees that they'll all charge the same leads to a reduction in competition not an increase in it.

I can understand that there is a possible argument that if suppliers aren't competing on price then they have an incentive to try and find other inducements that will encourage customers to book with them over their 'competitors' but generally speaking cartels result in complacency on the part of suppliers because they are maximising their profits for very little effort on their part. I'm not saying that I like what is happening with the industry being dominated by a shrikng number of companies but price maintenance was never going to stop this.

I choose to shop at my local Co-op whenever I can in preference to the likes of Tesco or ASDA because I believe in co-operative principles and support local family owned businesses in my town because I care about what my local high street looks like. But I can afford to pay the higher prices that they charge and I don't kid myself that everybody can afford to do this. Making the likes of Tesco charge the same as the Co-op for Heinz baked beans wouldn't necesarily protect them anyway because they would still stock a smaller range of goods than the Tesco super store 3 miles away which stocks more brands of baked beans than the Co-op with the result that many people would still choose to shop at Tesco. Just like I do myself when I want a bottle of my favourite Manzanilla which the Co-op doesn't stock.

SM

It isnt a contradictory comment at all. Its all about expertise, knowing the product and serving the customer correctly. And when did you ever take the pice of a tin of beans into sainsburys and demand that they charge you less than tesco, the 2 things cannot be compared.
Take cruises as an example. A few years ago I was invited to visit the Ventura before she was launched, and the Chief Executive of P&O was on board and he made a speech to us and begged the agents to stop giving such huge discounts as it was having a detrimental effect on business, indeed he suggested that if the agents didnt stop P&O would step in and do it for them. And guess what...they didnt stop and P&O have now limited commission to 5% to all agents to stop agents undercutting each other. Now I worked for a cruise specialist who worked on the best customer service and knowledge of their product and refused to get involved with cut-throat discounting. They are still in business and are thriving whereas some of their competition have gone by the wayside in recent weeks. My wife has 14 years experience in travel yet all her job is now is brokering prices. Her knowledge is irrelavent because if the agent down the road is £5 cheaper she loses the booking to them. If every agent had to charge the same it would be a case of who is the best at their job getting the business. I would add that I also worked in travel for nearly 15 years, but am out of the industry now as I became very disillusioned with it, we both loved working in travel but its not what it was, nor is it ever likely to be again, 5 years there will be no High street agents left and that is sad.