The Competition and Markets Authority (CMA) opened initial phase 1 investigations into IVC's takeover of eight independent vets businesses in December last year. IVC is the largest provider of veterinary services in the UK, with over 1,000 veterinary practices providing small animal, equine and farm animal veterinary services such as surgeries, vaccinations, and microchipping.
As with other recent CMA merger investigations in the veterinary sector, the deals take place against a backdrop of a small number of corporate groups, including IVC, buying up large numbers of independent practices and local chains of vets across the UK.
The deals that give rise to today's findings were completed between September 2021 and March 2022. IVC chose not to notify the CMA about these deals and they were not publicised at large at that time. The CMA subsequently identified potential concerns as part of its ongoing monitoring of mergers and acquisitions and opened initial investigations in December 2022.
Following these investigations, the CMA found competition concerns in the supply of veterinary services for small animals (typically household pets) in 23 local areas across Essex, Kent, Suffolk, Norfolk, Anglesey and South Wales. Concerns were also found in relation to the supply of out-of-hours emergency care for small animals in local areas in Norfolk and Suffolk and in the supply of equine veterinary services in local areas in Berkshire, Buckinghamshire, Bedfordshire and Oxfordshire.
The CMA's investigation found that the combined businesses would account for a significant proportion of these veterinary services in each local area of concern. While IVC previously competed with the independent businesses that it has acquired at each of these locations, the CMA is concerned that it would not face sufficient competition after the mergers. This could lead to pet and other animal owners facing higher prices or a worse quality of service, including more limited treatment options or reduced opening hours.
Colin Raftery, Senior Director of Mergers, at the CMA, said:
The CMA continues to receive complaints about higher prices or lower quality services as a result of too many vets' practices in the same area being under the control of a single company.
As a small number of large players continue to buy up independent practices and chains across the UK, we're continuing to closely monitor their activities so that we can take action to ensure that customers in areas where vets are acquired aren't left facing a lack of competition.
As living costs continue to rise and budgets are stretched even further, it's particularly important that households across the UK shouldn't be paying over the odds to get the right quality of treatment for their pets.
IVC 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 investigation(s).
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