UK watchdog proposes sweeping reforms of $8 billion vet sector

(Reuters) -Britain's competition regulator proposed sweeping reforms to the country's $8 billion veterinary services market on Wednesday, saying pet owners often lack clear information on prices and overpay for medicines.

However, the Competition and Markets Authority's provisional findings from a review of the sector were broadly as expected and did not include any negative surprises, analysts said, alleviating uncertainty that has pressured shares of vet services groups.

Shares of CVS Group, which operates about 470 veterinary practices across the UK and Australia and was one of six large veterinary groups named in the CMA's investigation, soared as much as 18% in early trade in London. Pets At Home, which was also named as one of the large vet groups, rose as much as 4.5%.  

The CMA said pet owners pay about 17% more on average at large veterinary chains than at independent clinics, with average prices across the sector surging 63% between 2016 and 2023, and far outpacing inflation. 

The regulator's proposed measures include requiring vet businesses to publish comprehensive price lists, creating a price comparison website and capping prescription fees at 16 pounds.

"Pet owners are often left in the dark, not knowing whether their practice is independent or part of a chain or what a fair price looks like," Martin Coleman, chair of the inquiry group, said in a statement.

RBC Capital analysts said the CMA's proposals "should finally remove the overhang from the sector", with no enforced asset divestment and a continued preference to focus on improved transparency for a more competitive marketplace for vet pharmaceuticals, rather than any major focus on price controls. 

CVS Group said it has plans in place to implement some measures, including joint branding of its practices and publishing standardised price lists, though it added not all the proposed moves are "fully justified".

The CMA said a final decision will be published by March 2026, with some measures potentially coming into force before the end of next year.

(Reporting by Nithyashree R B and Yadarisa Shabong in Bengaluru; Editing by Nivedita Bhattacharjee and Frances Kerry)