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CMA launches full market investigation into UK veterinary services

The UK’s Competition and Markets Authority (CMA) has launched an expedited statutory market investigation into the veterinary services sector in light of concerns it has identified in that industry following an initial review and consultation.

On 23 May the CMA decided to open a formal market investigation, under the Enterprise Act 2002, into “the supply in the UK of veterinary services for household pets, including the supply of prescribed veterinary medicines for such pets”. In parallel, the CMA has also published guidance to help consumers when choosing a vet practice and treatments for pets.

“This is another example of the CMA using a public consultation to bypass the lengthy market study stage and move straight to a formal market investigation.” said Tadeusz Gielas, competition law expert at Pinsent Masons.

The investigation follows the outcome of a recent CMA public consultation on whether to make a market investigation reference (MIR) under the Enterprise Act. That consultation was prompted by CMA findings in an initial review of the vet sector, conducted in September 2023, that garnered over 56,000 responses from pet owners and industry professionals and raised concerns about the affordability and transparency of veterinary services for household pets in the UK. The in-depth investigation will use the CMA’s formal market investigation powers under the Enterprise Act.

Reflecting the main provisional concerns raised in the authority’s MIR decision, the CMA expects to examine whether (i) consumers receive adequate and timely information to make informed decisions; (ii) pet owners face limited choice of vets in some local areas; (iii) profits earned by vet businesses are consistent with the levels expected in a competitive market; (iv) vet businesses have the ability and incentive to limit consumer choice when providing treatments or recommending related services, particularly when they are part of large integrated groups; and (v) the current regulatory framework is preventing the market from functioning as well as it could.

The CMA has wide powers to impose a range of legally enforceable remedies after completing a market investigation, depending on the nature and extent of any competition concerns it may identify.  Potential remedies that the CMA could impose include mandating the provision of certain information to consumers, imposing maximum prescription fees, and even imposing structural remedies – such as ordering the sale or disposal of a business or assets. The CMA may also make recommendations to government, such as suggesting changes to the regulatory framework.

Gielas said: “Market studies and market investigations are a powerful statutory tool the CMA may use to examine markets and address competition concerns it identifies, in circumstances where other competition laws might not be applicable or sufficiently effective.  For example, it has recently scrutinised the housebuilding sector and is currently examining the infant formula market, as part of the CMA’s broader work to contain cost of living pressures.”

“Notably, the CMA’s new powers to conduct pro-competition interventions in digital markets, introduced by the recently enacted DMCC Act, are modelled on the market studies and investigations regime.” said Gielas.

The statutory deadline for completing the market investigation is 22 November 2025, subject to a possible six-month extension.  The CMA plans to publish working papers that will set out its initial thinking between October and December 2024, and to publish its provisional decision – on which interested parties will be able to make submissions – in February or March 2025.

Despite these considerable timescales, the CMA considers that a market investigation is the “quickest way effectively and comprehensively to address” its concerns - if confirmed during the in-depth examination - because of the CMA’s “ability to impose enforceable remedies directly at the end of the market investigation” through its order-making powers.

The CMA Board’s advisory steer recommends that the investigation prioritises areas “most likely to affect consumers”, such as “the effects of new business models, vertical integration and local concentration following consolidation in the market, and factors that may lead to consumers over-paying for veterinary services or medicines”.  The “role that pet insurance, and the insurers themselves, have in the supply of veterinary services for household pets” may also be considered although that is not a focus of the investigation.

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