CMA raises competition concerns in two-fifths of UK areas

Up to 40% of UK communities could be experiencing a lack of competition for veterinary services, according to a new report.

Independent practice representatives said the Competition and Markets Authority’s (CMA) intent to launch a full market investigation shows the growth of corporate influence has been harmful to both the sector and pet owners.

But one major provider has claimed the authority’s concerns could be addressed without an investigation, while another accused it of failing to properly account for its business model.

‘Preliminary assessment’

A report setting out the authority’s case for further investigation, published on 12 March, contained what was described as a “preliminary assessment” of corporate practice ownership.

It found that, out of 2,831 postcode districts across the UK, 1,134 – or 40.06% of the total – could have competition issues.

Most of them, 804, were areas with one first opinion practice (FOP) and no other competitor, which the report estimated would account for services worth up to £600 million.

The remainder were areas where a large corporate group has a market share of at least 30% and owns two or more FOPs. The report argued that those figures gave “reasonable grounds to suspect” that aspects of the market either prevent, restrict or distort competition with a risk of higher prices, lower service quality and reduced investment as a consequence.

The publication of the report, and the intention to investigate further, has been welcomed by the Federation of Independent Veterinary Practices (FIVP).

‘Detrimental’

FIVP’s business development manager Rita Dingwall said: “We are glad to see that its findings confirm the stance that we have held for many years – that the consolidation of the veterinary profession is detrimental, not only to the clients we serve, but also to the veterinary profession as a whole. The spread of corporate-owned, profit-oriented practices across the country will mean that veterinary costs continue to soar.”

But although they have pledged to continue engaging with the CMA process, the largest UK provider, IVC Evidensia, insisted veterinary markets were “highly competitive” and its practices can face strong competition from both other corporate groups and independent providers.

Its statement continued: “We have always sought to ensure our pricing is appropriate, fair and competitive, and inform customers before any cost is incurred for any treatment.

‘Incredibly disappointed’

Meanwhile, Pets at Home said it was “incredibly disappointed” by the report, which it claimed did not reflect its model of locally owned practices and operational independence for their veterinary leaders.

Its spokesperson said: “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.”

And Medivet chief executive Chris Cools said: “We will, of course, collaborate with the CMA and fully support their process as we have done before, but our ambition and plans remain unchanged.”

Approach

But the report also revealed that the CMA was approached by several of the larger corporate groups, which own around half of all UK veterinary practices between them, for initial talks about potential solutions short of a full investigation.

Although no formal proposals were presented, and no details of them have been disclosed, the authority said there was a “considerable gap” between its concerns and the ideas that were put forward.

However, the CVS Group, the only company to have confirmed its involvement in the approach as Vet Times went to press, insisted the plans “could be adopted across the market and could address the CMA’s concerns more quickly than an 18-month investigation”.