CMA releases findings of veterinary review
The CMA is to launch a formal Market Investigation.
The Competitions and Markets Authority (CMA) has published a report of its findings, following an initial review into the veterinary sector.
The department said that its review, which received over 56,000 responses from the public and the veterinary industry, raised multiple concerns in the market – prompting it to suggest a formal Market Investigation.
If agreed, the Market Investigation will allow the CMA to fully investigate its concerns, and intervene directly with the market if necessary.
Findings published by the CMA revealed that concentrated local markets, partially driven by sector consolidation by large corporate groups, could be leading to weakened competition.
Large corporations, such as CVS Group and IVC Evidensia, may be concentrating on investing in and selling more sophisticated, higher cost treatment options to their clients. This can prevent consumers from accessing more simple, lower cost treatments.
The CMA reports that almost 60 per cent of veterinary practices are owned by one of the six large veterinary corporations, with these groups continuing to expand their reach by acquiring independently owned veterinary practices.
It says that this reduces the number of business models available in some locations, where most of the first opinion practices may be owned by one corporate group. Consumers are therefore left with less choice, instead choosing whichever practice is nearest.
Furthermore, four out of the six large corporate groups were found to not be changing the branding of the independent practices they acquire. Pet owners who are comparing practices are not always comparing competitors, and may be comparing two practices owned by the same corporate group.
Also among the findings was the suggestion that regulatory framework, dating from 1966, is outdated for the current veterinary market. The framework relates to individual practitioners, rather than practices as businesses, meaning that statutory regulator the Royal College of Veterinary Surgeons (RCVS) has limited leverage over commercial elements of veterinary business.
This means that RCVS has less control over the transparency of practice ownership and the prices of services, so consumers may be paying more for their medicine.
Based on these findings, the CMA has now begun a four-week consultation on a proposal to launch a formal market investigation. It will seek views from the sector until 11 April 2023.
Sarah Cardell, chief executive of the CMA, said: “Given these strong indications of potential concern, it is time to put our work on a formal footing. We have provisionally decided to launch a market investigation because that’s the quickest route to enable us to take direct action, if needed.”
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