Vets face possible probe over UK competition watchdog's concerns
CMA says pet owners potentially overpaying for medicines
CVS shares drop over 19%; Pets At Home hits 3.5 year low
Pets At Home says 'incredibly disappointed'
CVS, others, offer possible remedies
Adds response from Pets At Home in paragraph 7, details on CVS' package in paragraphs 11-13
By Yadarisa Shabong and Eva Mathews
March 12 (Reuters) -Britain's vets could face a formal market investigation by the country's competition regulator after an initial review raised concerns about pricing and competition in the sector.
Concerns that pet owners might not be getting a good deal prompted the Competition and Markets Authority (CMA) to start looking last September into Britain's veterinary market, which is estimated to be worth more than 2 billion pounds.
This review flagged several concerns including pet owners potentially overpaying for medicines, concentrated local markets and large companies potentially acting in ways that reduce choice and competition.
Britain's six largest veterinary groups are CVS Group CVSG.L, IVC, Linnaeus, Medivet, Pets at Home PETSP.L and VetPartners. Since 2013, 30% of the 5,000 vet practices in Britain have been bought by these firms, the CMA said.
News of the CMA's provisional decision hit shares, with Pets At Home dropping to 252.2 pence, its lowest level since July 2020, while CVS Group tumbled more than 19%.
"We are incredibly disappointed the CMA's findings today do not fully reflect our unique business model of locally-owned vet practices," a Pets At Home spokesperson said.
Those vet practices are led by individual vets who choose their own pricing, products and services, Pets At Home said.
Pets At Home, whose retail operations sell everything from pet food to clothing, has been expanding its vets business.
CVS, one of Britain's biggest veterinary chains, said it had already put forward a package of possible remedies along with other companies that could address the CMA's concerns "more quickly than an 18-month investigation".
Those remedies included providing a price list for common treatments, the option to get prescriptions and buy medicines elsewhere, making clear which groups own First Opinion Practices (FOPs) and referral services.
But the CMA said in a document outlining its concerns that there was a "considerable gap between our provisional concerns and the proposed remedies".
"Our concerns relate to the conduct of multiple firms and in some cases apply across the market," the CMA added, addressing the remedies submitted by CVS along with other groups that together own 50% of FOPs in the UK.
The CMA said it will decide on its next steps after its consultation closes on April 11.
Reporting by Yadarisa Shabong and Eva Mathews in Bengaluru; Editing by Rashmi Aich, Sherry Jacob-Phillips and Alexander Smith
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