UK’s competition watchdog: pet owners might be overpaying for medicines

Following an initial review of the veterinary sector, the UK’s Competition and Markets Authority (CMA) has expressed concerns regarding high pricing and competition in the industry.

The competition body found that some pet owners find it difficult “to access basic information like price lists and prescription costs,” leading to them paying more for medicines. 

“We are also concerned about weak competition in some areas, driven in part by sector consolidation, and the incentives for large corporate groups to act in ways which may reduce competition and choice,” says the CMA’s Chief Executive Sarah Cardell.

The body has launched a 4-week consultation period until 11 April 2024 to gather feedback from relevant stakeholders on how to proceed with the market investigation. 

According to Cardell, this is the “quickest route to enable us to take direct action, if needed.”

Targeting the main players

The CMA’s investigation is expected to target Pets at Home, CVS Group, IVC Evidensia, Linnaeus, Medivet, and VetPartners, as these companies have acquired over 30% of the 5,000 existing veterinary practices in Britain.

The CMA warns that British pet owners might be overpaying for medicines and prescriptions as over 80% of veterinary practices currently do not have any pricing online. “Pet owners tend not to shop around between vet practices and assume prices will be similar, although that is not always the case,” says the CMA.

There are also concerns over consumers not receiving enough information about treatments and costs to choose the best veterinary practices. 

Big concentration

The competition watchdog primarily worries about sector consolidation weakening overall competition, as 60% of the country’s vet practices are owned by larger groups. 

According to the CMA, 4 out of 6 of the largest groups don’t rebrand when taking over an independently owned vet practice, eliminating consumers’ ability to compare competitors.

The competition regulator is also concerned about larger groups’ ability to create a potential monopoly on sophisticated, higher-cost treatments, forcing consumers away from simple, lower-cost ones. 

Industry responds with caution

The British Veterinary Association (BVA) has expressed its support for the CMA’s investigation.

However, representing 19,000 vets across the UK, the body highlighted that “rising prices are a concern for everyone” and drew attention to the fact that there is no public health service for pets.

“Whether they are employed by corporate or independently owned practices, vets deliver highly specialized, tailored care for the UK’s pets and the cost is a fair reflection of investment in medical equipment, supplies and medicines, and the time vet teams dedicate to the care of each patient,” says the BVA’s president Dr. Anna Judson.

The CVS Group notes it has extended a “package of possible remedies” to the CMA that could address its concerns “more quickly than an 18-month investigation.”

Unique business model

Pets at Home, however, warns that the CMA is grouping their company with other players despite acknowledging its “unique business model,” which allows individual practices clinical freedom. 

“Whilst our brand is national, our veterinary practices are led by individual entrepreneurial vets who have clinical and operational freedom. They choose all pricing, products and services to ensure the best care for clients and their much-loved pets in their local area, which promotes competition in the market and helps to keep prices low,” a spokesperson notes to GlobalPETS.

According to specialized media, since the CMA’s decision to launch a potential investigation, Pets at Home’s share prices dropped 8.79%, while CVS’ fell by 21.21%.