CMA responds to vet sector questions

The Competition and Markets Authority (CMA) has defended its approach to issuing its provisional remedies for the veterinary sector.

In a webinar held today (29 October), CMA officials addressed questions put forward by the sector regarding its proposed reforms.

While some of the proposals have been broadly welcomed, other measures – such as the requirement for practices to inform clients they may be able to acquire cheaper veterinary medicines online, and to provide same-day written prescriptions – have prompted concerns about potential unintended consequences.

Others have also hit out at the remedy package for a perceived failure to address increasing corporate ownership within the sector.

Extensive consolidation

Asked in the webinar by BVA president Rob Williams why the CMA isn’t proposing requirements for large veterinary groups (LVGs) to divest some of their practices, CMA director, markets Lucy Eyre said: “Choice and the overall structure of the market, despite the extensive consolidation, isn’t the driver of price increases across the sector as a whole.”

She said pet owners “generally have a decent choice” of first opinion practices and that almost 90% of areas had a choice of four or more owned by different companies.

She said the CMA also investigated LVGs’ provision of a range of services and whether vertical integration – attempting to keep clients within the group – is causing issues for independent suppliers of related services, but “we didn’t find any evidence that this was having an adverse effect on competition in the market”.

Ms Eyre added the lack of price transparency and medicine price mark-ups are an issue throughout the sector and that while on average pet owners were paying more at large groups, “that doesn’t mean that we should or that we can require large groups to sell off their practices”.

She added: “We also think that regulation that restricts just specifically who can own a vet practice doesn’t get to the root cause of these market-wide problems.”

Increase competition

She said the CMA expects transparency to increase competition and noted the authority has previously prevented practice acquisition to address competition concerns in specific local areas via its merger control powers and can continue to assess future LVG acquisitions.

Ms Eyre also suggested transparency can help address pet owner expectations regarding the outcome of the investigation on pricing and admitted the CMA did consider a price control, but due to the complexity of the market it felt a “one size fits all approach just couldn’t be appropriate”.

Regarding the proposed requirement of issuing same-day written prescriptions to pet owners – which has sparked fears of having less time to treat animals – the CMA’s assistant director of economics, Alistair Love, responded: “This will be an important measure to ensure that pet owners will not have to make multiple visits to the vet to get a written prescription. This could be an additional barrier to pet owners buying medicines elsewhere.”