CMA to launch formal investigation into vet market

(Sharecast News) - The UK's Competition and Markets Authority said on Tuesday that it has provisionally decided to launch a formal market investigation after a review into the veterinary industry found that pet owners could be paying too much for medicines or prescriptions. The watchdog highlighted "multiple concerns" in the market.

Consumers may not be given enough information to enable them to choose the best veterinary practice or the right treatment for their needs, it said. In addition, concentrated local markets, in part driven by sector consolidation, may be leading to weak competition in some areas.

The CMA found that large corporate groups may have incentives to act in ways which reduce choice and weaken competition.

The review also found that the regulatory framework is outdated and may no longer be fit for purpose.

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.

"These include pet owners finding it difficult to access basic information like price lists and prescription costs - and potentially overpaying for medicines. We are also concerned about weak competition in some areas, driven in part by sector consolidation, and the incentives for large corporate groups to act in ways which may reduce competition and choice.

"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."

Shares of AIM-listed veterinary services provider CVS Group tumbled on the news and by 0915 GMT, they were down 18% at 1,196.45p. Meanwhile, Pets at Home shares were 2.8% lower at 267.40p.