UK CMA reforms: will greater transparency lower prices?

Consumer markets tend to rely on customers shopping around to keep prices in check. But in veterinary care, finding out what different practices charge can be tricky.

Well, that is about to change.

After more than two years of scrutiny, the Competition and Markets Authority (CMA) has finalised its review of the UK veterinary market. A legally binding order was issued on 22 September, marking the beginning of a substantial overhaul of how clinics communicate prices and other information to pet owners. The focus of reforms has been on transparency. Practices will now be required to publish prices for a range of common procedures, disclose whether they are part of a corporate group and, for more expensive treatments, provide clients with a written estimate beforehand. Implementation will be phased, with the first changes taking effect later this year.

The rationale is simple: if pet owners can more easily compare prices, increased consumer switching and competitive pressure should lead the market to self-regulate. Whether this approach will deliver the intended outcome, however, remains to be seen. While similar interventions have worked well in some sectors, the veterinary market, where decisions are often high-stakes and deeply emotional, may respond differently. Many are now watching with interest to see how events unfold – and not just in Britain. After all, concerns about affordability are not unique to the UK.

In the past three years, Denmark, France, Sweden, the Netherlands and Finland have all had local competition authorities reviewing the market following concerns around pricing and corporate consolidation. None of these have, however, introduced any legally binding reforms yet.

In the US, similar concerns have prompted political scrutiny of the growing influence of private equity in veterinary care. The Federal Trade Commission has also intervened in several acquisitions, although the wider market has yet to face the kind of comprehensive investigation undertaken in Europe.

The UK is therefore emerging as an important test case for a question facing veterinary markets elsewhere: can greater transparency translate into more effective price competition?

Against this backdrop, Aldavin will soon release its first Cost of Care report which tracks pricing movements across a continuous sample of n=500 small-animal clinics in the UK as the new reforms take effect.

For policymakers and veterinary businesses beyond the UK, the findings should offer an early indication of whether greater transparency is beginning to deliver the competitive benefits anticipated by the CMA.

More to come.