CMA launches full investigation into vet sector

The Competition and Markets Authority (CMA) has launched a full investigation into the veterinary sector after its proposal was “overwhelmingly endorsed” in the consultation period.

It received 56,000 responses from pet owners and people working in the sector.

The sector has changed massively in the last decade, when 90% of vets were independent. Now that figure is around 40%.

The CMA will examine whether profits earned are consistent with the levels expected in a competitive market, if vet businesses have the incentive and ability to limit consumer choice, and if pet owners are being affected by a limited choice of vet businesses in some areas.

The six large corporate vet groups in the UK include Cheadle-headquartered Pets at Home is a FTSE 250 group worth £1.3bn which returned more than £100m to shareholders in its last financial year through dividends and share buybacks.

Bristol-headquartered IVC was founded in 2011 and now has 10,000 staff in the UK, a number matched by Solihull-based Linnaeus, which was founded in 2014, and York-based VetPartners, which formed with three practices in 2015.

Sarah Cardell, chief executive of the CMA, said: “The message from our vets work so far has been loud and clear – many pet owners and professionals have concerns that need further investigation.

“We’ve heard from people who are struggling to pay vet bills, potentially overpaying for medicines and don’t always know the best treatment options available to them. We also remain concerned about the potential impact of sector consolidation and the incentives for large, integrated vet groups to act in ways which reduce consumer choice.”

The CMA has formal market investigation powers to gather additional evidence, and force remedies that could include imposing maximum prescription fees and ordering the sale or disposal of a business or assets.

The regulator can also make recommendations to government that it believes would reduce anti-competitive activities within affected sectors.

Pets At Home’s share price initially fell 6% before recovering slightly to be trading down 3% on the day.

A Pets at Home spokesperson said: “We will continue to fully cooperate with the CMA to ensure our unique and pro-competitive business model of locally-owned vet practices is fully understood.

“Whilst our brand is national, our veterinary practices are led by individual entrepreneurial vets who have clinical and operational freedom and work tirelessly to always put pets needs first.”

Click here to sign up to receive our new South West business news...