The competition watchdog bit back at the vet sector today, claiming pet owners may be left overpaying for medicine as a wave of buyouts of independent practices has stifled competition.
The Competition and Markets Authority (CMA) is to launch a formal market investigation on the industry after an “unprecedented” 56,000 responses to its initial review, which launched in September. CMA boss Sarah Cardell said the amount of comments “shows the strength of feeling on this issue is high and why we were right to look into this”.
The launch of a market investigation means the regulator may take action “if it finds that competition is not working well”. That action could include requiring vet chains to display certain information to customers, capping prescription fees or ordering large vet chains to sell off some of their practices.
The body said it heard concerns about prices not being displayed on websites or made available until after treatment has happened, and customers “potentially overpaying for medicines”.
Larger vet chains have rapidly been buying up independent practices in recent years. The watchdog noted that in 2013, around 10% of vet practices belonged to large groups, but that share is now almost 60%. It said six chains – CVS, IVC, Linnaeus, Medivet, Pets at Home and VetPartners – have done most of the buying.
The CMA noted that vets rarely change branding when this happens, so it is not always clear who owns an individual practice. Medivet and Pets at Home use a single brand for all their vet practices, while the other four do not.
“This means pet owners are not always comparing competitors when choosing a vet practice,” the CMA said.
Many pet owners, the regulator says, are unaware that they can get prescriptions filled elsewhere, rather than directly from the vet. This, it said, could lead to overpayment. Meanwhile, 80% of vets have no pricing information available on their websites, and in many cases, prices are not clear until treatment has already been given.
Michael Foote, CEO of pet insurance comparison site, Quotegoat.com, said: “The decision by the UK watchdog to initiate a formal investigation into veterinary pricing is not just much-needed but also long overdue, addressing concerns voiced by thousands of pet owners.
“The lack of transparency in pricing has left countless pet owners in a state of uncertainty regarding the potential financial implications of treatment, leading to situations where some may delay seeking veterinary care out of fear of hefty bills, meaning animals endure unnecessary suffering.
“It always feels like such a gamble when you take an animal to the vet – you never quite know what you’ll be charged for… Pet house owners should be supplied with clear and clear pricing data upfront, akin to the readability one expects from healthcare providers reminiscent of dental care.”
Shares within the two listed firms the CMA talked about fell this morning. CVS tumbled by as a lot as 25% to 1090p, lower than half its share value earlier than the preliminary September overview. Pets at Home, which makes near 10% of its income from its Vets for Pets model, was down as a lot as 6.1% to 258.6p, 32% beneath its value in early September.
A Pets at Home spokesperson stated: “We are extremely dissatisfied that the CMA’s findings at the moment don’t totally mirror our distinctive business mannequin of locally-owned vet practices. Whilst our model is nationwide, our veterinary practices are led by individual entrepreneurial vets who’ve scientific and operational freedom.”
The agency added that it sees no impression on its progress technique.
