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Britain’s competition watchdog is launching an investigation into the market for veterinary services, saying pet owners may be overpaying for medicines and prescriptions.
The Competition and Markets Authority said on Tuesday it would launch a full market investigation into the sector, having opened a preliminary investigation last September after the regulator found a lack of transparency on prices and on the ownership of veterinary practices.
The veterinary market has become increasingly concentrated over the past decade, with large groups now owning almost 60% of practices, the CMA said. Six groups, some owned by private equity firms, have acquired 1,500 of Britain’s 5,000 practices since 2013. The firms have also bought related businesses, including diagnostic and out-of-hours care labs.
“Our review has identified multiple concerns about the market that we believe need to be further investigated,” CMA chief executive Sarah Cardell said.
“These include pet owners having difficulty accessing basic information such as price lists and prescription costs – and potentially overpaying for medicines. We are also concerned about weak competition in some areas, driven in part by industry consolidation.”
Shares in CVS Group, one of the UK’s largest veterinary chains, fell as much as 21% in early trading. Shares of Pets at Home, a pet products retailer that also provides veterinary services, fell 5%.
The CMA said it had five key concerns from its initial review, including a lack of information for consumers which prevented pet owners from shopping around for treatment, large groups undermining competition by focusing on higher cost treatments using more expensive equipment and an outdated regulatory framework for the industry dating back to 1966.
About a quarter of pet owners didn’t know they could save money by having prescriptions filled somewhere other than their veterinary practice.
The CMA received 56,000 responses from the public and industry to its initial survey, a level that shows how important the issue is to millions of pet owners, the watchdog said.
The CMA has launched a four-week consultation on its proposal to open a formal investigation, after which the regulator will decide how to proceed.
In a statement CVS said it had “engaged constructively” with the CMA since the regulator began its initial review. The company added that it had submitted remedies that would address the CMA’s concerns “faster than an 18-month investigation”.