CVS Group PLC shares on Thursday plunged as the UK Competition & Markets Authority launched its review into the country’s household pets veterinary sector.
The stock was down 30% at 1,466.12 pence in London on Thursday around midday. Shares in retailer Pets at Home Group PLC, which also operates veterinary practices, were down 7.6% at 350.00p.
The CMA on Thursday said it will examine consumer experiences and business practices among UK providers of veterinary services for household pets. It noted that the market is worth over £2 billion and that pet ownership ‘increased significantly’ after the start of the Covid-19 pandemic.
The regulator said it was ‘concerned that pet owners may not find it easy to access the information they need about prices and treatment options to make good choices about which vet to use and which services to purchase.’
It added that independent practices in 2021 only comprised about 45% of the industry and that many practices could be one of hundreds belonging to a larger company without consumers knowing. This could affect their choices and reduce incentives for competition among local practices, it said.
‘Households are under strain from the rising cost of living and it is important that pet owners get value for money from their vets - but figures suggest that the cost of vet services has risen faster than the rate of inflation,’ the CMA added.
CVS commented that it ‘has always sought to ensure its prices are appropriate and reflect fair value to our clients.’ However: ‘As the CMA have recognised, there continues to be a significant shortage of vets in the UK and employment costs represent the most significant proportion of our cost base. Our pricing reflects this and other inflationary pressures experienced in recent years.’
Previously, in September 2021, the CMA had opened an investigation into CVS’s £20.4 million acquisition of Quality Pet Care, which trades as The Vet, and in February judged that the deal would reduce competition in Bristol, Nottingham, Portsmouth, Southhampton and Warrington.
In June 2022, it ended the probe after CVS agreed to divest the entire The Vet business and later sold it for around £9 million, incurring an impairment of around £12 million.
‘We always work closely with our regulators and we and our colleagues will support the CMA review,’ CVS said, adding: ‘We have a clear strategy to continue to expand our network and to improve clinical care through investment in facilities, equipment, technology and our people.’
CVS is due to announce its full-year results on September 21.
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