Leading vet groups opposed competition inquiry

Five of the six large veterinary corporate groups opposed the competition regulator’s plans to launch a full market investigation into the £5 billion-a-year industry.

The Competition & Markets Authority pressed ahead with the inquiry last week amid concerns that pet owners may be overpaying for medicines. It came after a consultation and an initial review last September that prompted an “unprecedented” 56,000 responses from pet owners and those working in the sector.

• Vets may be overcharging pet owners, regulator says

Pet ownership has risen sharply since the pandemic and that growth has coincided with consolidation in the industry, led by private equity firms. Almost 60 per cent of vet practices in the UK are owned by large companies, up from about 10 per cent a decade ago.

In the past ten years about 1,500 of the British 5,000 vet practices have been acquired by six large corporate groups: CVS Group and Pets at Home, both of which are listed on the London Stock Exchange; IVC Evidensia, which is backed by EQT, a Swedish private equity firm; Medivet, owned by CVC Capital Partners; VetPartners, owned by BC Partners; and the Linnaeus group.

In their responses to the regulator, five of the six opposed its proposal to launch a so-called market investigation, according to the CMA’s report. It said CVS had not explicitly opposed an investigation and was “more neutral”.

All six were said to have “expressed disappointment that we had not accepted a package of measures proposed by some of the large corporate groups to improve communication between vets and pet owners, to increase transparency around pricing and ownership, arguing that these would have addressed the majority of the issues highlighted by the CMA in its consultation”. Officials concluded they did not provide a “sufficiently comprehensive solution”.

• Veterinary sector faces full market investigation

The investigation, which is set to last 18 months, could lead to vets being forced to be more open with pet owners about the prices they charge and who owns them. Companies maybe forced to set maximum prices or to sell practices.

Concerns about potential remedies have hit the share prices of CVS, which has roughly halved over the past 12 months, and Pets at Home, a more diversified retailer behind the Vets for Pets practices, jointly owned with local practitioners. Pets at Home’s shares are down by a quarter over the same period.

The Big Six also warned the regulator of the mental health pressures on vets, staff shortages and retention problems. They raised concerns about unintended consequences from a lengthy investigation and most highlighted reports of increased abuse of vet workers since the CMA’s intervention.

Sarah Cardell, the authority’s chief executive, said last week that the regulator was aware of the “acute staff shortages and difficult working conditions for vets”, but added that people were “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 that reduce consumer choice.”

Anna Judson, president of the British Veterinary Association, which represents about 19,000 vets in Britain, has said that “while fees reflect the investment needed to keep practices financially viable and open, we recognise more can be done to improve client choice and vet teams are already taking action to address the Competition and Markets Authority’s specific concerns around transparency of fees and practice ownership.”

Shares in CVS were up by 2p, or 0.2 per cent, in afternoon trading, while those of Pets at Home were 7½p, or 2.6 per cent, higher at 290¾p.