The Competition and Markets Authority (CMA) has published a working paper detailing its proposed approach to analysing profitability and financial performance in the UK veterinary services market.
This forms part of an ongoing market investigation into veterinary services for household pets.
The working paper outlines the CMA’s methodology, including the time frame for analysis, the profitability measures to be used, and the evaluation of profitability across various veterinary service providers. The paper aims to assess whether profit levels in the sector indicate healthy competition or potential market failures.
Focus on Profitability in the Veterinary Sector
As part of the investigation, the CMA will conduct a detailed financial analysis to determine if the current profit levels are indicative of a competitive market. The findings will contribute to a broader assessment of competition within the sector, incorporating evidence on pricing, service quality, and market entry dynamics.
The CMA will evaluate whether sustained periods of high profitability suggest competition is not functioning effectively. To do this, financial data has been requested from six large corporate groups (LCGs) dominating the market: CVS, IVC Evidensia, Linnaeus, Medivet, Pets at Home, and VetPartners. Additionally, financial information from smaller veterinary businesses will be included in the analysis.
Methodology and Stakeholder Input
The working paper provides an overview of the CMA’s intended methodology. This includes examining internal documents from the LCGs, such as those outlining acquisition strategies and financial performance reports presented to senior management.
The CMA is seeking feedback on this proposed approach and has invited comments from stakeholders by 5pm on Friday, 22 November 2024. This consultation aims to ensure the analysis accurately reflects market conditions and informs the investigation’s conclusions on competition issues in the veterinary services market.
