Introduction: Full investigation into vets market announced
Good morning, and welcome to our rolling coverage of business, the financial markets and the world economy.
Britainâs competition authority is getting its teeth into the UKâs £5bn/year veterinary practice market, by launching a full investigation into the sector.
The Competition and Markets Authority (CMA) has announced this morning it will. launch a full-scale market investigation into the veterinary sector, to examine concerns that the market wasnât working properly and that customers are getting a bad deal.
The CMAâs move comes after 56,000 people, including customers and vet professionals, raised concerns about practices within the £2bn industry, through the regulatorâs initial inquiry into vets.
The investigation could force vets to give certain information to consumers â to address concerns that theyâre not given the full facts when making decisions about pet care, or impose maximum prescription fees to prevent them bring ripped off.
The CMA adds that it could also order the sale or disposal of a business or assets â addressing concerns that private companies have muscled into the vets market in recent years.
Sarah Cardell, chief executive of the CMA, says this morning that a formal market investigation is âessentialâ.
The message from our vets work so far has been loud and clear â many pet owners and professionals have concerns that need further investigation.
Weâve heard from people who are struggling to pay vet bills, potentially overpaying for medicines and donât always know the best treatment options available to them. We also remain concerned about the potential impact of sector consolidation and the incentives for large, integrated vet groups to act in ways which reduce consumer choice.
In March we proposed that a formal market investigation was the best route to fully explore these concerns and, if appropriate, take direct action to address them. That proposal has been overwhelmingly endorsed through our consultation.
While weâre aware of acute staff shortages and difficult working conditions for vets, we consider a formal market investigation is essential to ensure good outcomes for the millions of pet owners in the UK as well as professionals working in the sector. The independent inquiry group will now take this investigation forward and, in the meantime, weâre publishing some tips to help pet owners better navigate vet services.
Weâre launching a full investigation into the #vets sector, after consulting on our provisional decision to do so.
The investigation will explore our key concerns in more detail and shape any remedies to address them, if needed.
Read more: https://t.co/pfPVRSkvJ6 pic.twitter.com/8DHX3EZKR8
— Competition & Markets Authority (@CMAgovUK) May 23, 2024
The CMAâs inquiry will examine whether:
-
consumers are getting the information they need, at the right time, to make informed decisions
-
a limited choice of vet businesses in some local areas is impacting pet owners
-
profits earned are consistent with the levels expected in a competitive market
-
vet businesses have the incentive and ability to limit consumer choice when providing treatments or recommending related services, particularly when they are part of large integrated groups
-
the regulatory framework is preventing the market from functioning as well as it could
Also coming up today
New economic data from the UK, and across the eurozone, will show how Britain and Europeâs private sector companies are faring this morth.
The UK purchasing managers index is expected to show solid growth across the services sector, and a small contraction in manufacturing.
The health of the economy will be closely watched after Rishi Sunak yesterday announced a general election on 4th of July, in a high-stakes gamble.
The election is coming earlier than the City expected, says Ipek Ozkardeskaya, senior analyst at Swissquote Bank
Maybe he is scared that inflation will pick up until autumn and he will lose his âwe pulled inflation to normal levelsâ rhetoric. Whatever it is, the fact that the UK election is due on July 4 combined with yesterdayâs hotter-than-expected inflation print, washed out the expectation of a June rate cut from the Bank of England (BoE) That expectation went from a coin flip to none in just one session.
Former British Post Office boss Paula Vennells is due to resume her testimony to the inquiry into the Horizon scandal â hereâs how day one unfolded:
The agenda
-
9am BST: Eurozone flash PMI survey for May
-
9.30am BST: UK flash PMI survey for May
-
12.30pm BST: Bank of England chief economist Huw Pill speaking at the ReykjavÃk Economic Conference
-
1.30pm BST: US new housing index for April
Key events
CVS, one of the Big Six companies who now dominate the vets market, has told the London stock market that it will support the CMA with its investigation.
In a statement to the City, CVC says:
CVS has a clear strategy with its purpose to give the best possible care to animals and its vision to be the veterinary company people most want to work for. The Group is proud of the dedication and commitment of its colleagues in providing great care to its clients and their animals.
CVS launched a new clinical governance framework in November 2023 as an industry first in the UK veterinary sector. This clinical governance framework places contextualised care at the heart of the Groupâs approach to providing clients and their pets with appropriate care. This focus is neatly reflected in the Groupâs approach to understanding client needs under the mantra of âwhat matters to you, matters to usâ.
CVS understands that the CMA market investigation commences today and will be conducted over the next 18 months and looks forward to further updates from the CMA at the appropriate time.
Last month, my colleague Rupert Neate wrote an excellent piece examining how pet care become such big business.
It outlined how pet owners have been paying hundreds, or thousands, of pounds for ever more complex treatments.
For exampleâ¦
Everyone seems to have a story: £3,000 for blood tests for a lethargic cat; £2,000 to have a jack russellâs broken tooth removed; £400 to bandage a rabbitâs dislocated toe. Others complain of routinely being sold drugs at several times what they cost online.
These spiralling costs have come as six big corporate chains have acquired more and more vets practices, and now own 60% of the market.
As Rupert explained:
Until a change in the law in 1999, only qualified veterinary surgeons could own vet clinics. This meant most practices were small businesses run by partners who knew their patients and played an important role in the community, just as in the cosy 1980s TV series All Creatures Great and Small. In the last few decades, though, big businesses have been buying up practices at a furious pace, drawn by their often healthy profit margins, which could be increased by consolidating services under a big corporate umbrella. Vets are also regarded as ârecession-proofâ, as Britons will cut back on just about everything else to prioritise their pets.
In 2013 about 10% of vet practices were owned by six large corporations; now 60% are. But the march of the âbig sixâ corporations has gone unnoticed by many pet owners as four out of six practices keep the name and branding of the previous independent business. In the majority of cases they also keep on the existing vets, giving the former owners new titles such as clinical director (and, often, a lottery winner-sized cheque).
Well worth a read:
The terms of reference of the CMAâs investigation are online here.
They explain that the inquiry will examine the supply in the United Kingdom of veterinary services for household pets, including the supply of prescribed veterinary medicines for such pets.
It adds:
The CMA has reasonable grounds to suspect that a feature or a combination of features of the market for the supply of those goods and services in the UK prevents, restricts, or distorts competition.
The CMAâs top 3 tips for pet owners
The CMA has also issued three tips to help pet owners get a good service.
1. Look further than the closest vet
Many pet owners told us they choose a vet based simply on how close it is to where they live. It might feel convenient, but fees and services do differ between practices so check to be sure itâs the right one for you.
2. Ask if there are other treatment options
Getting a treatment that works for you and your pet is what matters most. Itâs important that you understand why your vet has recommended a particular treatment or test. But if youâre not sure about a treatment, or youâre worried about the cost, speak to your vet.
3. If itâs not urgent, consider buying the medication elsewhere
When itâs an emergency, we just want to get our pet the medication they need as quickly as possible. But if your pet needs non-urgent care, then it can be cheaper, even when you include your vetâs prescription fee, to buy the medication elsewhere – such as an online pharmacy or specialist pet shop. Around a quarter of pet owners who responded to our call for information were not aware of this.
The CMA has appointed an inquiry group to handle its investigation into the veterinary services markets.
The group will be chaired by Martin Coleman, a former partner at law firm Norton Rose Fulbright, and spend its first few months collecting more evidence and analysing it.
Coleman says the inquiry will be both comprehensive and complex, explaining:
The vet services market is worth an estimated £5 billion a year and provides a necessary service to pet owners so itâs right that we fully investigate competition concerns â this matters to businesses, veterinary professionals and, crucially, the 16 million households in the UK who have pets.
Market investigations are, by their nature, comprehensive and complex. They require time to fully explore concerns and to ensure that all points of view are heard so we can reach the right outcomes and take appropriate action, if needed, to make the market work for everyone.
Introduction: Full investigation into vets market announced
Good morning, and welcome to our rolling coverage of business, the financial markets and the world economy.
Britainâs competition authority is getting its teeth into the UKâs £5bn/year veterinary practice market, by launching a full investigation into the sector.
The Competition and Markets Authority (CMA) has announced this morning it will. launch a full-scale market investigation into the veterinary sector, to examine concerns that the market wasnât working properly and that customers are getting a bad deal.
The CMAâs move comes after 56,000 people, including customers and vet professionals, raised concerns about practices within the £2bn industry, through the regulatorâs initial inquiry into vets.
The investigation could force vets to give certain information to consumers â to address concerns that theyâre not given the full facts when making decisions about pet care, or impose maximum prescription fees to prevent them bring ripped off.
The CMA adds that it could also order the sale or disposal of a business or assets â addressing concerns that private companies have muscled into the vets market in recent years.
Sarah Cardell, chief executive of the CMA, says this morning that a formal market investigation is âessentialâ.
The message from our vets work so far has been loud and clear â many pet owners and professionals have concerns that need further investigation.
Weâve heard from people who are struggling to pay vet bills, potentially overpaying for medicines and donât always know the best treatment options available to them. We also remain concerned about the potential impact of sector consolidation and the incentives for large, integrated vet groups to act in ways which reduce consumer choice.
In March we proposed that a formal market investigation was the best route to fully explore these concerns and, if appropriate, take direct action to address them. That proposal has been overwhelmingly endorsed through our consultation.
While weâre aware of acute staff shortages and difficult working conditions for vets, we consider a formal market investigation is essential to ensure good outcomes for the millions of pet owners in the UK as well as professionals working in the sector. The independent inquiry group will now take this investigation forward and, in the meantime, weâre publishing some tips to help pet owners better navigate vet services.
Weâre launching a full investigation into the #vets sector, after consulting on our provisional decision to do so.
The investigation will explore our key concerns in more detail and shape any remedies to address them, if needed.
Read more: https://t.co/pfPVRSkvJ6 pic.twitter.com/8DHX3EZKR8
— Competition & Markets Authority (@CMAgovUK) May 23, 2024
The CMAâs inquiry will examine whether:
-
consumers are getting the information they need, at the right time, to make informed decisions
-
a limited choice of vet businesses in some local areas is impacting pet owners
-
profits earned are consistent with the levels expected in a competitive market
-
vet businesses have the incentive and ability to limit consumer choice when providing treatments or recommending related services, particularly when they are part of large integrated groups
-
the regulatory framework is preventing the market from functioning as well as it could
Also coming up today
New economic data from the UK, and across the eurozone, will show how Britain and Europeâs private sector companies are faring this morth.
The UK purchasing managers index is expected to show solid growth across the services sector, and a small contraction in manufacturing.
The health of the economy will be closely watched after Rishi Sunak yesterday announced a general election on 4th of July, in a high-stakes gamble.
The election is coming earlier than the City expected, says Ipek Ozkardeskaya, senior analyst at Swissquote Bank
Maybe he is scared that inflation will pick up until autumn and he will lose his âwe pulled inflation to normal levelsâ rhetoric. Whatever it is, the fact that the UK election is due on July 4 combined with yesterdayâs hotter-than-expected inflation print, washed out the expectation of a June rate cut from the Bank of England (BoE) That expectation went from a coin flip to none in just one session.
Former British Post Office boss Paula Vennells is due to resume her testimony to the inquiry into the Horizon scandal â hereâs how day one unfolded:
The agenda
-
9am BST: Eurozone flash PMI survey for May
-
9.30am BST: UK flash PMI survey for May
-
12.30pm BST: Bank of England chief economist Huw Pill speaking at the ReykjavÃk Economic Conference
-
1.30pm BST: US new housing index for April
