The impact of proposed veterinary business regulations on small practices

The British Veterinary Association (BVA) has raised significant concerns over the Competition and Markets Authority’s (CMA) proposed reforms to the veterinary sector, arguing that the remedies could disproportionately affect smaller practices. The BVA, which represents professionals across the veterinary industry, believes the new measures risk jeopardising the financial viability of independent clinics and unintentionally harming consumer choice.

Among the proposed changes, the CMA has suggested introducing a price comparison website for veterinary services, capping prescription fees, creating a veterinary ombudsman, and implementing stricter regulatory oversight. These recommendations stem from the regulator’s findings during its investigation into the £2 billion veterinary market, initiated due to concerns around steep price increases, a lack of transparency, and limited competition within the sector.

The BVA has criticised these proposals as being too extensive, warning that smaller practices could face unsustainable operational pressures if forced to comply. Dr Elizabeth Mullineaux, President of the BVA, stated that the measures, if introduced simultaneously, could exacerbate some of the very issues they aim to resolve, including rising costs and dwindling competition within the market.

The regulator’s investigation was launched following reports of corporate consolidation across the veterinary sector. During the COVID lockdowns, pet ownership in the UK surged, with over three in five households now owning at least one pet. This surge coincided with private equity firms acquiring numerous independent veterinary businesses, leading to concerns about market concentration and reduced consumer options.

Dr Mullineaux emphasised that smaller, independent clinics could struggle to manage the complexity and financial burden of these reforms. She warned that the unintended consequences could lead to higher costs for pet owners and potentially worsen animal welfare, undermining the CMA’s goals of improving affordability and access.

While the BVA has urged regulators to reconsider the scale and immediate implementation of the reforms, the Unite union has argued for even stricter measures. Sharon Graham, General Secretary of Unite, criticised large private equity-backed veterinary firms, accusing them of prioritising profits over quality care and fair treatment of staff. Graham noted that regulatory weaknesses have allowed significant problems to persist, which, in her view, require more robust intervention than proposed by the CMA.

There is speculation that government pressure to promote economic growth may lead to a diluted version of the proposed regulatory changes. However, investor sentiment has been somewhat placated by the absence of more radical solutions, such as forced divestments of corporate-owned practices, which had been feared earlier in the investigation.

The debate over these reforms underscores the delicate balance required between improving transparency and competition in the veterinary market while avoiding unintended consequences that could harm smaller businesses and consumers alike. The outcome of this process may significantly shape the future structure of the industry.