(Sharecast News) – Shares of Pets at Home and CVS Group tumbled on Thursday after the Competition and Markets Authority said it was launching a probe into the £2bn veterinary services market for household pets.
The competition watchdog said it will explore how well the market is working for pet owners and whether they are receiving the information they need at the right time to get appropriate treatment for their pets.
The CMA said it was keen to hear more about pet owners’ and vet practitioners’ experiences of pricing of services, including whether pet owners were aware of how much a treatment would cost, and how they pay for it.
It also wants to hear about how prescriptions and medication for pets are arranged and sold and how pet owners choose a vet surgery – whether they are aware that their vet may be part of a larger chain which might also own other surgeries in the area.
The use of out-of-hours and emergency vet services where options might be limited will also be looked into.
CMA chief executive Sarah Cardell said: “Caring for an ill pet can create real financial pressure, particularly alongside other cost of living concerns. It’s really important that people get clear information and pricing to help them make the right choices.
“There has been a lot of consolidation in the vet industry in recent years, so now is the right time to take a look at how the market is working.
“When a pet is unwell, they often need urgent treatment, which means that pet owners may not shop around for the best deal, like they do with other services. This means they may not have the relevant information to make informed decisions at what can be a distressing time. We want to hear from pet owners and people who work in the sector about their experiences.”
Pets at Home owns veterinary groups Companion Care Vets and Vets4Pets and has a network of more than 450 vet practices across the UK. CVS Group, meanwhile, is one of the largest integrated veterinary services providers in the UK.
At 0925 BST, Pets shares were down 11.2% at 336.20p. Shares of AIM-listed vet services provider CVS Group were down 29% at 1,479.00p.
Russ Mould, investment director at AJ Bell, said: “Being in the pets and vet space has felt like a healthy place to be in recent years. That’s been reflected in strong share prices for the likes of vet group CVS and Pets at Home which has its own veterinary arm within a broader retail and grooming offering.
“Britons love their animal companions and are willing to pay up to keep them healthy and happy.
“News that the competition authorities are looking into the rising costs and potentially anti-competitive practices in the industry has set the cat among the pigeons when it comes to the share prices of CVS and Pets at Home.
“The sell-off seen today could be an overreaction, although the CMA review looks to be wide-ranging. The problem for both businesses is the process is likely to be time-consuming and, with a further update not due until early 2024, it could weigh on both stocks for some time to come.”