The Competition and Markets Authority (CMA) has outlined its preliminary concerns that the purchase of twelve independent veterinary businesses by Medivet Group Limited (Medivet) could lead to worse quality, a more limited range of services or higher prices for pet owners in affected areas across England and Northern Ireland.
The CMA opened its investigation into Medivet's purchase of seventeen independent veterinary businesses in March this year. Medivet is a large multinational veterinary group with over 400 veterinary centres across the UK that offer veterinary services primarily to small animals, including at 24-hour centres.
This is the fourth CMA investigation into acquisitions in the veterinary sector in the last two years and comes against a backdrop of an increasing number of transactions in which corporate groups purchase small, independent veterinary services across the UK.
Medivet's purchases took place between September 2021 and September 2022. Medivet did not sufficiently publicise the purchases and chose not to notify the CMA at that time. The CMA identified potential concerns as part of its ongoing monitoring of mergers and acquisitions and opened initial investigations in March 2023.
Following these investigations, the CMA found competition concerns in relation to 12 transactions regarding the supply of veterinary services for small animals (typically household pets) in 34 local areas across England and Northern Ireland. The CMA also found competition concerns in relation to two of these twelve transactions regarding the supply of out-of-hours veterinary services to small animals in five local areas in England.
In each of these deals, the CMA found that the combined businesses would account for a significant proportion of the veterinary services offered in each location of concern. The CMA found no competition concerns arising for three purchases (The Hollies, Canine Healthcare and Withy Grove) and in April found that two purchases (Monument Vets and Stanhope Park) did not meet the statutory requirements to be investigated further.
Sorcha O'Carroll, Senior Director of Mergers, at the CMA, said:
There are around 17 million pet-owning homes across the UK with consumers spending around £4 billion a year on vets and other services for pets. Particularly while household budgets are already stretched, it's crucial that 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 has 5 working days to offer legally binding proposals to the CMA to address the competition concerns identified. The CMA would then have a further 5 working days to consider whether to accept these instead of referring the cases to Phase 2 investigations.
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