‘We are watching you’, regulator tells sector after latest probe

A regulator has vowed to maintain its focus on the UK veterinary sector amid continuing fears of more expensive and lower‑quality services for clients due to practice takeovers.

The warning from Competition and Markets Authority (CMA) followed publication of the initial findings of its fourth major investigation of industry activities in two years.

The body is expected to deliver its verdict on the response of the company at the centre of the latest probe – Medivet – this week.

But as Welsh politicians prepare to examine the impact of corporatisation on veterinary services there, CMA officials have indicated broader worries about the trend of acquisitions are not dying down.

Owners spending £4 billion

Sorcha O’Carroll, the authority’s senior director of mergers, argued the issue’s importance was demonstrated by estimates suggesting UK pet owners spent £4 billion on veterinary and other services in the year to June 2021, along with the present economic challenges.

She said: “Particularly while household budgets are already stretched, it’s crucial we ensure continued access to good‑quality pet care at a fair price.

“We continue to receive concerns that independent vet practices being bought out by a single company could lead to a loss of competition at a local level, resulting in higher prices or lower‑quality services.

“We will continue to monitor the impact of these types of deals so we can take the necessary action to ensure reduced competition won’t reduce the overall availability and quality of local veterinary services.”

Medivet review

The comments came as the CMA outlined its concerns relating to a series of acquisitions made by Medivet between autumn 2021 and September last year.

Although 17 separate deals were initially under review, matters relating to two of them were dropped last month when they were found not to meet the statutory requirements for investigation.

The findings of a first‑phase inquiry, released on 18 May, also found no grounds for concern relating to three more acquisitions during that period.

But the CMA concluded a “realistic prospect” existed of a substantial loss of competition relating to small animal services in 34 separate local areas of England and Northern Ireland, arising out of the other 12 transactions under investigation.

Similar concerns were identified over out‑of‑hours provision in five parts of England affected by two of the deals.

Five days

Medivet was given five working days – ending on 25 May – to submit proposals for how the identified concerns could be addressed.

If submissions are made, the CMA has another five working days – until 2 June – to determine whether they are likely to be acceptable.

A Medivet spokesperson told Vet Times the company was considering “all of our options” for the businesses concerned, although it had not been confirmed whether a response had been submitted at the time of going to press.

The spokesperson added the firm was “incredibly disappointed” and “strongly disagreed” with the CMA’s decision on the transactions where concerns were identified, but “delighted to welcome our colleagues, clients and patients” from the other practices whose acquisitions can now proceed.

Investigations

The Medivet ruling follows similar concerns raised by the CMA in relation to acquisitions made by other large veterinary firms – including CVS Group, IVC Evidensia and VetPartners – since autumn 2021.

Veterinary public health company Eville and Jones has also completed a sale of the Vorenta Group, which it acquired last September, following a CMA investigation.

The authority has the legal powers to investigate merger deals where the acquired concern generates more than £70 million of its turnover in the UK, or where the combined entity holds at least 25% market share either nationally or in a substantial local area.

But its officials have also highlighted data showing the proportion of independently owned practices within the UK veterinary sector slumped from 83% in 2013 to only 45% in 2021, to help explain its recent interventions.

The issue is also set to be examined by senior Welsh politicians during a session to be held at the Senedd in Cardiff following calls, led by Anglesey‑based campaigner Linda Joyce‑Jones, for an independent inquiry.

Submissions

Professionals and members of the public have been invited to make submissions ahead of the event, on 21 June, and senior figures from the RCVS are expected to attend.

Miss Joyce-Jones, who has previously criticised the CMA for not taking action in the sector earlier, said she had been left “broken‑hearted by what the profession has become”.

She added: “There isn’t a day that passes that I don’t encounter broken individuals who share their lives with animal companions. Equally, I talk and meet with many precious dedicated veterinary professionals who are simply at their wits’ end.

“It’s wonderful that so many have come forward to share their experiences so something constructive can come out of this corporate chaos we all find ourselves in.”