Two brochure giants look to merge
BP Travel Marketing Services is acquiring brochure distribution rival Au Logistics for an undisclosed sum.
The two groups say they are being forced to merge because of the dramatic fall in the number of brochure packs and high street travel agents.
The deal, which would create just one player in the shared brochure distribution market, is subject to regulatory approval from the Office of Fair Trading.
The OFT now has up to 40 working days to make its decision.
According to BP, the number of brochure packs has dropped from 12m five years ago to less than 7m today.
BP, which is responsible for around 4m packs, said the market has also been squeezed by the 25% drop in street travel agents.
Its own Ashford operation and Au’s Birkenhead business will continue “as neither site alone could cope with all the brochures, especially during distribution peaksâ€.
Cost savings would instead come from improved delivery consolidation, it claimed.
Au managing director Gary Winterburn will leave the business, along with Au operations director Rick Menzies.
Winterburn said he plans to remain in the travel industry and was now looking into a couple of other projects, which should come to fruition in the next few months.
Au commercial director Graham Murray will join the new group, which will be headed up by existing BP managing director Paul Markland.
Markland explained: “The current shared distribution model, which delivers a pack of brochures to a high street travel shop anywhere on the mainland for less than the price of a litre of diesel, relies on volume to maintain the economies of scale.
“For understandable reasons brochure print runs have reduced so, by pulling the two sets of volume together we can maintain the current service levels and pricing.â€
He said the acquisition would put BP and Au in a “strong position to deal with the changes the internet is making to the marketing of holidays, the current economic downturn and the consolidation of brands and shops resulting from the four into two mergers of the major tour operators”.
“However let’s be upbeat – travel agents and brochures are a valuable part of the holiday sales chain and will be for a long time to come,†he added.
By Bev Fearis
Bev
Editor in chief Bev Fearis has been a travel journalist for 25 years. She started her career at Travel Weekly, where she became deputy news editor, before joining Business Traveller as deputy editor and launching the magazine’s website. She has also written travel features, news and expert comment for the Guardian, Observer, Times, Telegraph, Boundless and other consumer titles and was named one of the top 50 UK travel journalists by the Press Gazette.
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