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UK competition watchdog investigates holiday firms over refunds | Business

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The UK competition watchdog is investigating package holiday firms after receiving thousands of complaints from consumers who have been unable to recoup money on cancelled breaks.

The Competition and Markets Authority said it had received 60,000 complaints related to the coronavirus crisis, including difficulties getting money back and price rises.

Holiday firms and airlines were the subject of almost 27,000 of the complaints, and those businesses accounted for three-quarters of the submissions involving cancellations and refunds.

The CMA said package holiday firms would be added to the list of businesses its Covid-19 taskforce was investigating. It said it had concerns about firms that refused refunds, made it difficult for consumers to obtain refunds, or insisted that consumers rebook or accept vouchers.

If firms were found not to be complying with the law, they could be taken to court, the CMA added.

The lockdown has forced hotels and holiday parks to close and prevented people from travelling to planned breaks.

The CMA said that in most cases it would expect customers to be offered a full refund if the service they had booked was not provided, including when the customer had cancelled themselves if it was due to the lockdown.

In many cases, holidaymakers have been told that deposits are unrefundable, or that they need to make a special request if they want a refund rather than a voucher. Many are struggling to get through to customer service teams, whose members are working from home and are often short-staffed.

The CMA said that with summer holiday season approaching, “the potential harm to consumers from companies failing to respect consumers’ cancellation rights is set to grow”. It has referred complaints about airlines to the Civil Aviation Authority, which oversees those companies.

The CAA is separately reviewing the way that airlines are treating their customers, and last week warned them that it did not “expect airlines to systematically deny consumers their right to a refund”.

In late April, the CMA said it would be investigating firms providing holiday accommodation along with those in the wedding and childcare sectors. In its update, it had opened cases against some companies in those sectors.

The CMA stressed that most businesses were doing the right thing, saying that complaints related to just over 16,000 individual private-sector businesses in the UK.

“The vast majority of businesses are behaving in a reasonable way, but the CMA will not hesitate to take enforcement action if there is evidence that businesses have breached competition or consumer protection law,” it said.

Between 11 and 17 May, an average of 1,200 people a day got in touch to make a complaint, of which about 850 involved cancellations and refunds. Most of the rest involved price rises, typically on food and drink or hygiene-related products.

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The CMA said the largest price increases reported to it concerned hand sanitiser, with a reported median rise of just under 400%.

The travel sector has been hard hit by the crisis, with the accountancy group UHY Hacker Young saying average turnover among agencies and tour operators slumped by 56% in March.

Total turnover was £1.2bn that month, compared with £2.6bn last March, it said, adding that companies had faced cancellations at what would have been some of the highest-revenue points in their calendar.

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Coronavirus is a defining test for Thailand’s powerful business families

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With the coronavirus crisis hammering Thailand’s economy and millions of citizens registering for cash handouts, Prime Minister Prayuth Chan-ocha recently made an unusual public appeal to the kingdom’s powerful billionaire business families, asking them to “do more”.

“I would like to ask you if you could do more in utilising your abilities and talents in helping and healing the people of Thailand, who are suffering very badly, in a quicker, more efficient manner,” he wrote in an open letter to 20 of the country’s richest people last month. 

Thailand has confirmed just over 3,000 coronavirus cases and 57 deaths. This is a relatively light caseload but the disease has devastated the country’s tourism sector and many of its industries, turning this year into a defining one for Thailand’s billionaire-led conglomerates — companies that grew rich over decades in symbiosis with the ruling establishment and are now being asked to pay back. 

Thais sometimes speak of the “five families” that control much of their economy, who built sprawling businesses from modest beginnings in Bangkok’s Chinatown: the Chearavanont family controls Charoen Pokphand; the Chirathivats are behind department store operator Central Group; the Sirivadhanabhakdi family controls drinks group ThaiBev; the Srivaddhanaprabhas are the family behind duty-free giant King Power, whose assets include Leicester City football club; and Yoovidhya family members are major shareholders in Red Bull, the energy drinks business co-founded by the late Chaleo Yoovidhya.

“Big business groups and family-owned conglomerates exist in all countries,” said Pavida Pananond, associate professor at Thammasat Business School. “But the extent of wealth and power that they control in Thailand is much more concentrated.”

At the top of Mr Prayuth’s intended targets was Dhanin Chearavanont, the 81-year-old scion of Thailand’s richest family and honorary chairman of CP, the largest of the family groups and one of Asia’s biggest conglomerates.

Even before Mr Prayuth had sent his letter, CP was already at work on a $3m mask factory outside Bangkok, which it built in just five weeks and handed over to a leading hospital and the Thai Red Cross Society. 

In the same week as Mr Prayuth’s appeal, the company announced donations of coronavirus test kits, protective equipment, food for frontline medical personnel, and other assistance totalling Bt700m ($22m). 

“We are a company in Thailand, we are part of Thailand,” Suphachai Chearavanont, CP’s chief executive and Mr Dhanin’s son, told the Financial Times in an interview. “If Thailand has a problem, under this circumstance we are all in it together. We have to survive this situation as a country.” 

Perhaps most crucially for Thailand’s largest private-sector employer, the group also promised to protect the jobs of its 300,000 employees. 

“One of the things the prime minister was pushing was, ‘please don’t fire your people’,” said Jessica Vechbanyongratana, assistant professor of economics at Chulalongkorn University. “He was saying companies had a responsibility to keep them employed during the crisis, and not to put an additional strain on the government.”

CP’s reach runs from the seeds and animal feed it sells to farmers to poultry and seafood processing and restaurant and retail operations, including Thailand’s more than 12,000 7-Eleven stores. 

Overseas, CP is best known for launching a successful $10.6bn bid to buy Tesco’s Thai and Malaysian supermarkets, in what would be Asia’s biggest acquisition this year. Thailand’s competition office is reviewing the deal because of the commanding retail footprint it would give CP, which also owns Siam Makro, the country’s biggest cash and carry chain.

Mr Supachai limited his remarks to the FT to the company’s Covid-19 response and declined to comment on the transaction, other than to say CP is “moving forward with the deal”. 

Dhanin Chearavanont, the 81-year-old scion of Thailand’s richest family and honorary chairman of CP Group, pictured in 2012 © Bloomberg

Other tycoons who have offered help include Thai-German Harald Link, chief executive and owner of the conglomerate B. Grimm, which offered Bt46m of coronavirus aid. Prasert Prasarttong-Osoth, owner of Bangkok Airways and Bangkok Dusit Medical Services, pledged Bt100m for digging ponds and wells in drought-stricken areas.

Central Group vowed to cut prices for some consumer essentials, make medical donations and preserve jobs for its 74,000 staff. 

However, Thailand’s billionaire conglomerate owners have made it clear they will not be giving the state any money.

Mr Suphachai pointed out that Thailand was in far better shape to handle the economic fallout of Covid-19 than in 1998, when the Asian financial crisis caused the country’s financial system to teeter. 

“For Thailand, this is a good time for the government to borrow and invest more in infrastructure and in supporting the transformation of all the major industries,” Mr Suphachai said. Mr Prayuth himself clarified that he wanted the billionaires’ advice, not money, after critics accused him on social media of heading a “beggar government”. 

CP has offered the government a white paper listing ideas ranging from transforming farming and tourism with the help of digital technology to using tax breaks to lure skilled foreigners to work in the kingdom.

“Singapore has 6m people, of which 2m are foreign workers,” Mr Suphachai said. Thailand, with its larger population, could afford to accommodate “5m knowledge workers from around the world”. 

CP has actually hired during the pandemic, confirming some Thais’ belief that it can profit in all business conditions. Its 7-Eleven convenience stores, which were allowed to remain open during lockdown, recruited 20,000 staff to accommodate home deliveries. 

“We are moving forward, we are looking at Thailand in the long term,” Mr Suphachai said. “We will be here forever.” 

Follow John Reed on Twitter: @JohnReedwrites

Editor’s note

The Financial Times is making key coronavirus coverage free to read to help everyone stay informed. Find the latest here.



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Some businesses better off staying closed: Chamber president – BC News

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Some businesses could be better off staying closed than risk re-opening during the second phase of the B.C.’s government’s plan to safely and gradually re-open the economy, according to Val Litwin, president and CEO, BC Chamber of Commerce.

“This crisis isn’t over for BC businesses. You can go out of business much faster with a partial or failed reopen than you can a temporary closure,” Litwin said. “Policy-makers must appreciate that business models will be very fragile during this early stage of the recovery cycle and that ongoing supports will be essential.”

Only 26 per cent of businesses impacted by COVID-19 feel able to restart and operate profitably with the gradual easing of restrictions, according to a survey of 1,343 member-businesses of the BC Chamber of Commerce, Greater Vancouver Board of Trade, Business Council of British Columbia, and other partners. 

The survey, conducted with the Mustel Group, was released May 22.

Given the challenges to restarting operations, over half of the members surveyed (55 per cent) expect it will take at least two months to restart.

The survey also found that 43 per cent of  businesses expect that they will still require significant and additional financial support or incentives from the provincial and federal government in order to continue operating. 

One of the challenges for business tenants is paying the rent.

The survey found that 26 per cent of commercial tenants were unable to pay their rent in full in April. The primary reason is that they were shut down and had no revenue (75 per cent). Others had no access to the federal Commercial Rental Assistance ( 30 per cent), while 19 per cent said they could not come to terms with their landlord.

In terms of businesses that have closed temporarily, the level is slightly higher in urban markets (50 per cent) than in rural (42 per cent), with the incidence highest in healthcare and social assistance; arts and entertainment; and accommodation and food services, all above 68 per cent.

Among retail establishments, 58 per cent will remain closed, at least temporarily. 

“The survey data shows virtually all respondents continue to experience lost revenue as a result of COVID-19 and restart efforts will be hampered by an inability to attract new and returning customers. We are facing the worst year for B.C.’s economy and job market in a century,” said Greg D’Avignon, president & CEO of the Business Council of British Columbia. He called on governments to “expedite economic activity and address competitiveness barriers in the form of tax, regulatory and process costs that stand in the way of businesses re-hiring the nearly 400,000 employees who’ve lost their jobs.”

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Brunswick business put on ice due to work permit rule

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BRUNSWICK, Ohio — When COVID-19 was declared a worldwide pandemic in mid-March, Brunswick resident Celeste Compola watched subsequent school and business closures with the somewhat heightened anxiety of all small business owners.

“When (Gov. Mike DeWine) announced the essential businesses and was asking food trucks to help at rest areas, I thought, ‘Cool, I’m a food truck,’” said Compola, owner of Celeste’s Tasty Treats Food Truck, an ice cream business she started three years ago after working for another company for two years.

Working in her hometown during the summer of 2020, however, has proved more complicated that Compola could have imagined.

As has been the case for the past two seasons, Compola received her approval from the Medina County Health Department and applied for a vendor’s permit in Brunswick in April.

“But when I dropped (the vendor’s permit application) off at the police department, I was told no,” she said.

In an effort to slow the spread of COVID-19, the city has temporarily suspended the issuing of permits to door-to-door solicitors. As it turns out, ice cream trucks are categorized as door-to-door solicitors in Brunswick.

“It wasn’t until coronavirus that this was brought to anyone’s attention,” Compola said. “Of all the ways I thought I would be affected by COVID, I never thought it would be this.”

Revisiting business designation

While the issue is being addressed by the city, a resolution is not expected before the next City Council meeting on June 8 — meaning the last few months is time Compola will not be able to recover, even though she has been permitted to operate in surrounding communities.

At a May 19 Economic Development Committee meeting, City Councilman Joe Delsanter said that while there are additional precautions that need to be taken with a business that predominately serves children — such as an ice cream truck — the business itself is essentially a food truck, in his opinion.

“At Honey Hut, you might have 40 cars wrapped around (the building),” Delsanter said. “The only difference here is that the vendor is coming through the neighborhood.”

Economic Development Committee chairman Councilman Nick Hanek moved to have the city law department further review the ice cream truck designation, for possible legislation as soon as the June 8 council meeting.

The committee agreed with Hanek’s motion, but Delsanter said he hopes Celeste’s Tasty Treats’ dilemma can be resolved without the need to “write a law,” due in part to the seasonal nature of the business and the time and money Compola has already lost.

Councilman Anthony Capretta echoed these sentiments in an interview last week with the Brunswick Sun.

“This is an exception to the rule,” Capretta said. “We are stopping treats for kids because of this COVID thing. If (City Manager Carl DeForest) isn’t going to put his name on (the permit), I’ll put my name on it. We will keep fighting until this lady gets her permit.”

Emotional toll

Compola said Brunswick makes up about 75 percent of her customer base. But the emotional strain of the permit denial, she said, has had at least as much of an impact as the financial loss.

“I will make a full recovery,” she said. “This community and I have really clicked. But I live here, and I can’t even drive out of town to do a private party, or park the truck in my driveway, without breaking a bunch of hearts.

“The kids don’t understand (why Compola is not permitted to stop). It’s had an effect on an emotional level. Yeah, it has really affected me.”

Read more news from the Brunswick Sun.

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