A coalition of veterinary groups has warned a regulator’s plan to assess profit levels risks “distorted outputs” that could impact the sector, public choice and animal welfare.

The BVA-led submission has also called for broader engagement, amid fears the current Competition and Markets Authority (CMA) process may ultimately incorporate more areas of practice than originally planned.

The document has been published today (3 January) among a series of submissions responding to a recent working paper released as part of the CMA’s ongoing market investigation.

‘Common feature’

The authority argues that profitability assessments are a “common feature” of such investigations and are meant to help them determine whether there are competition problems.

Its document continued: “This analysis should enable us to assess whether the levels of profitability achieved by firms in the market are consistent with a competitive market or could be considered to be excessive.

“If excess profits have been present for a sustained period of time, this could indicate that competition is not working as well as it could be.”

Sample

The authority said the assessment would be based on material from the six large corporate groups, which account for around 60% of all practices, plus a “representative” sample of independent practices including a small number of what it called “mid-tier” independent businesses with at least 10 practices.

The paper added that the inquiry group is currently working with a pilot group of 20 practices and would seek financial information from around 50 more.

But the BVA, together with the BSAVA, BVNA, SPVS and VMG, questioned whether such a sample could be “truly representative” of the entire sector.

Skewed by events

The groups also raised concerns about the likely timescales for assessment, which they fear could be skewed by events such as Brexit and the COVID-19 pandemic.

And they raised concerns that the process was “moving towards consideration of the wider veterinary market, incorporating farm and equine practice, without sufficient information or understanding of the way in which these services operate”.

The paper acknowledged it was “increasingly inevitable” that proposed remedies would affect the whole sector and warned it was “critical” for the CMA to engage with practices and professional bodies working in those areas as well as with household pets.

It concluded: “We consider there is a very significant risk that the approach as set out will create distorted outputs which have the potential to lead to suggested remedies with significant unintended consequences for the sustainability of veterinary practices, consumer choice and animal welfare.”

Although final recommendations are not expected until this autumn, the investigation’s current administrative timetable only gives interested parties until March to make final submissions before a provisional decision is issued around May or June.