Pet owners may be overpaying for medicines and prescriptions

The competition watchdog is launching a formal investigation after finding serious concerns that may reduce choice for consumers

UK vet groups could be forced to cap prescription fees or sell off parts of their business after the competition watchdog warned that pet owners may be overpaying for medicines.

The Competition and Markets Authority (CMA) said it is launching a formal market investigation after an initial review of the vets market raised “multiple concerns”.

It received an ‘unprecedented’ 56,000 responses to a call for information from both the public and veterinary professionals – including 45,000 from the general public – after launch its initial review of the £2 billion market in September.

Among the issues, it found consumers may not be given basic information like price lists and prescription costs, and are not always informed of the cost of treatment before agreeing to it.

It means they may be overpaying for medicines and prescriptions, the CMA said.

Sarah Cardell, the CMA’s chief executive, said the regulator ‘identified multiple concerns that we think should be investigated further.’

Weak competition reducing choice for consumers

The watchdog also identified concerns about weak competition in some areas, due to concentrated local markets and incentives for large corporate groups to act in ways which may reduce choice for consumers.

About 60% of vet practices now belong to large groups, up from 10% a decade ago, with large corporate groups continuing to look for ways to expand.

The six large corporate groups in the UK are CVS, IVC, Linnaeus, Medivet, Pets at Home and VetPartners, the regulator said.

Better access to information about pricing and treatments

Opening a formal investigation means the CMA has powers to intervene directly and enforce change in the industry.

This could include ensuring that consumers get easy access to information about pricing and treatment options, or imposing maximum prescription fees.

It could also mean ordering large vet groups to sell off parts of their business or assets in order to improve choice and ensure that local vet practices can compete over services and price.

‘Unprecedented’ levels of concern raised by pet owners

CMA chief executive Sarah Cardell said: “We launched our review of the veterinary sector last September because this is a critical market for the UK’s 16 million pet owners.

‘The unprecedented response we received from the public and veterinary professionals shows the strength of feeling on this issue is high and why we were right to look into this.

‘We have heard concerns from those working in the sector about the pressures they face, including acute staff shortages, and the impact this has on individual professionals.

‘But our review has identified multiple concerns with the market that we think should be investigated further.

‘Given these strong indications of potential concern, it is time to put our work on a formal footing.’

Shares in top-listed vet groups fall

Shares in top-listed vet groups tumbled following the announcement, with CVS falling by more than a fifth, and Pets at Home down by about 5%.

Pets at Home has said it is disappointed with the CMA’s findings into the vets market and that it does not think its business model reduces competition.

A spokeswoman for the group said: “We are incredibly disappointed the CMA’s findings today do not fully reflect our unique business model of locally-owned vet practices.

‘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.

‘We have been working closely with the CMA on their areas of concern and will continue to do so as their inquiry progresses to ensure the distinctiveness of our model is fully recognised.’