THE travel agency business is set for a major shake-up following the announcement that the Office of Fair Trading is considering legal action against Abta (the Association of British Travel Agents).

Under a long-standing rule known as Stabiliser, upheld by the Restrictive Practices Court in 1982, only Abta-member tour operators can sell their holidays through Abta travel agencies. Thanks to the consumer protection offered by Abta, this cartel arrangement was reckoned to be in the public interest.

However, following new EC rules which came into force at the beginning of the year, all tour organisers have to be bonded, making the cartel impossible to justify.

In a letter to the Association of Independent Tour Operators, some of whose members have been refused membership of Abta, Sir Bryan Carsberg, director general of the OFT, says that he is 'concerned' about Stabiliser. 'If Abta do not end it, I may apply to the court for leave to have the earlier decision which upheld Stabiliser reviewed.'

The OFT is already looking at the commercial links between tour operators and travel agencies, an investigation that could result in a referral to the Monopolies and Mergers Commission. Most agencies restrict the choice of operators they sell to as little as 40 or 50, but the OFT is keen to see a selection that reflects the 1,000 or more companies offering foreign packages.