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Thomas Cook/Co-Op merger given go-ahead by Competition Commission

Thomas Cook LogoCo-Operative Travel Logo

The Competition Commission has given the go-ahead for the Thomas Cook planned merger with the Co-Operative Group and the Midland Co-Operative Society.

The Commission has announced that they have provisionally given the go-ahead for the merger, announcing that the merger "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".

If the merger goes ahead it will bring together two of the three largest tour operators in the UK market. Currently, Thomas Cook has 780 stores, with Co-Op holding 360 and Midlands Co-Op with 100.

The CC will publish their final report by 16th August. Laura Carstensen, Competition deputy chairman and chairman of the Inquiry Group went on to say "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.

"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."

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