CMA Remedies working paper – mixed results for veterinary groups?

On 1^st May 2025, the Competition and Markets Authority (the “CMA”) published its Remedies working paper as part of its market investigation into veterinary services for household pets, which opened on 7^th September 2023.

Price caps and transparency

Most of the remedies proposed in the working paper focus on price caps on medicines, prescriptions and other services, together with price transparency such as the upfront publication of price lists for customers. The CMA has also suggested the creation of a comparison website in order that customers are aware of any cheaper options and feel greater freedom to “shop around” for veterinary services. This is designed to combat the increase in prices for veterinary treatments which, according to the CMA’s research, have increased by 60% between 2015 and 2023.

Operationally, this is likely to have an impact for the financial models run in veterinary practices across the board, whether independently owned or owned through a veterinary group, with a need to look for efficiencies in the operating costs of the practice. This may lead operators (whether independent or veterinary group) to look at selling such practices, and the corresponding impact on turnover is also likely to impact the valuation of veterinary practices going forward.

Maintaining or increasing competition

A principal concern for many of the veterinary groups, who the CMA has concluded own in aggregate 60% of veterinary practices in the UK between them, at the time the market investigation was commenced by the CMA would have been (a) a requirement to break-up of the veterinary groups or at the very least to divest themselves of practices to increase competition within certain geographies; or (b) a prohibition on them acquiring further practices to add to their portfolio.

Interestingly, the CMA’s analysis of the market has concluded that 94% of areas have at least three different competitors. Of the remaining 6%, the CMA remarks that those areas are served by only one or two operators and that many of these are in remote or coastal locations. As a result, the CMA considers that it may not be possible to increase competition through changing ownership of vet practices as the lack of competition is not because of acquisitions by veterinary groups. The CMA concludes that less than 4% of local areas in the UK could have competition increased through requiring veterinary groups to divest certain veterinary practices.

Therefore, it seems that the CMA’s appetite for issuing divestment orders will be limited, which will be a relief to the veterinary groups that have grown their practice portfolio over the last 12 years or so.

In addition, the CMA has not suggested that any ban on veterinary groups acquiring further practices will be imposed, which will be good news for veterinary groups who retain aspirations to continue to grow their practice portfolio. However, the CMA does note that “we might be concerned if the number of areas with few competitors increase” and the “merger control regime continues to apply where changes in control of vet businesses result in a substantial lessening of competition in local areas”. Therefore, veterinary groups looking to add to their practice portfolio should continue to strategically identify target practices in areas where there is a healthier level of competition, particularly given the greater understanding that the CMA will now have of the veterinary services sector as a result of the market investigation, and the scrutiny they will inevitably apply to acquisitions going forward.

Therefore, it is fair to say that the suggested remedies in the Remedies working paper represent a mixed bag of results for veterinary groups.

Next steps

It is worth noting that the Remedies working paper is a further consultation and the CMA’s provisional decision on the market investigation is due in July 2025, and the publication of the CMA’s final decision due in November 2025 (prior to the statutory deadline of 22 November 2025). In theory, therefore, the remedies proposed in the Remedies working paper could ultimately change between now and then, but it is fair to say that the Remedies working paper provides a useful insight into the CMA’s current thought process and the likely direction of travel as the market investigation heads towards a conclusion.

Any vet practices, vet professionals or other interested parties who wish to respond to the current consultation in the Remedies working paper have until 5pm on Tuesday 27^th May 2025 to do so.