There is too much competition

The recent news regarding the demise of Thomas Cook is very sad – particularly for the thousands of people who were employed, and particularly for the thousands of people who have had their holiday ruined. However, there have been long-term fears that the company could collapse, during which time over the last five years its directors and some non-executives had creamed off at least £47 million, with the chief executive alone taking home £8.3 million. There may have been extenuating circumstances for the company’s dismal financial position, but it all points to the fact that, as well as being mismanaged, there is too much competition in the industry and consequentially holidays are ridiculously cheap.

One very clever letter in the Telegraph remarked “If the cost of bringing back 150,000 holiday makers to the UK is £600 million (i.e. £4,000 each) there is an obvious flaw in Thomas Cook’s business plan”.

I opened up the Sunday Mail and counted 14 pages devoted to advertising holidays. I picked out one at random which advertised 19 nights in New Zealand including two flights halfway round the world, car hire, free upgrade, hotels, ferry transfers, rail journey, whale watching and so on, all for the price of £2,799 – i.e. £147 per day!

Competition is fine, apart from the fact that the big players in the businesses concerned are able to pass the cost of maintaining a margin to the very suppliers who provide them with the product they sell. This is one of the reasons why food prices in this country are maintained at a low level, and why currently all livestock farmers are unable to make a profit. Meanwhile, £15 billion of food is not consumed and ends up in landfill.

I entertained a group of Belgian food bloggers at Ashford Market one of whom was a retail butcher. He reckoned that the price he paid for beef was nearly twice the price of the wholesale market in the UK. Supermarkets rule and, without doubt, have their thumbs on livestock producers’ destinies. Supermarkets have succeeded in decimating the throughput at livestock markets and hence have reduced the competitive element of the auction system. They have done this not by offering a better price, but by conjuring up regulations that prevent cattle in particular, being sourced from an auction market and consigned immediately to the abattoir of their choice.

Without doubt one of the largest milk retailers has been coerced by the supermarkets in to forcing dairy farmers to send their cull cows direct to an abattoir rather than have the benefit of an auction market creating competition and helping to maintain the price. This will lead to a gradual reduction in the value of all cull cows – just what Tesco’s and their mates all want! It will also happen to the sheep industry but will take a little longer. Surely the Competitions Regulator should be invited to investigate.

Politicians continue to amaze me with their ability to conjure up legislation that defies all logic. Which dinosaur has been trying to ban outright the use of hands free telephones in cars and commercial vehicles? How many more thousands of police would it take to enforce this legislation? How many more accidents would be caused by drivers pulling on to the hard shoulder to take or receive a call? Further, is it more dangerous to have a hands free call than, for example, check your sat nav, light a cigarette, change the radio station, tell the kids to behave, or suggest to Management that she keeps her eye on the crossword and not her husband’s driving ability?

Going back in history, Emperors ran Empires, Kings ruled Kingdoms, and our country is now run by – guess who?

PS: Some late news – Corbyn’s rabble believe they now understand the real meaning of the word ‘democracy’ but as yet have not cottoned on to the significance of hypocrisy!