The Competition and Markets Authority (CMA) is bringing in reforms aimed at increasing price transparency
Fresh regulations designed to make veterinary treatment and costs more transparent and affordable could inadvertently lead to price increases, an industry specialist has cautioned.
The Competition and Markets Authority (CMA) is introducing reforms intended to boost price clarity, enabling pet owners to compare expenses more easily and purchase medications from alternative sources. However, Eddie Holmes, founder of comparison platform VetsCompared.com, fears some of the modifications could spark a “race to the top” on pricing instead of genuinely reducing charges.
Mr Holmes suggested the reforms, while well-meaning, might influence how independent surgeries determine their fees and could eventually result in pet owners facing higher bills.
He explained: “The assumption is that greater price transparency automatically creates more competition and lower prices. But that’s not always how markets work.
“When cheaper independent practices can clearly see nearby corporates charging significantly more for the same consultation, some may conclude they’ve been undercharging for years and hike their own fees.”
Among the CMA’s proposals is a requirement for surgeries to display consultation charges more prominently. While the reforms aim to help consumers compare options and reduce spending, Mr Holmes suspects they might establish a public pricing standard for veterinary practices themselves.
He explained: “A practice charging £42 for a consultation may discover nearby corporate groups are charging £65 to £80. Instead of thinking competitors are too expensive, they may simply decide they’ve been leaving money on the table.”
Another significant proposal aims to make it simpler for pet owners to purchase prescribed medications elsewhere by capping prescription charges and requiring vets to inform clients they might obtain medicines more affordably from alternative suppliers. The CMA contends this is necessary because veterinary practices serve as both prescriber and seller of medicines, creating potential conflicts of interest. However, Mr Holmes pointed out that medicine sales frequently subsidise other areas of an independent practice.
He said: “Many independent practices use medicine income to help keep consultation fees lower while covering staffing costs, equipment, rent and out-of-hours services. If that revenue falls, they won’t simply absorb the loss forever. They’ll have to recover it somewhere else, and consultation fees are the obvious place.”
Mr Holmes also raised doubts about whether more affordable independent practices genuinely wanted substantially more clients if they were already operating near full capacity.
He said: “Lower prices only make commercial sense if you’ve got room to see more patients. Many independents are already incredibly busy. Taking on extra work at underpriced consultation fees isn’t necessarily good business.”
Fresh analysis from within the sector has also indicated that the price difference between independent and corporate practices has started to close during the CMA’s inquiry. Mr Holmes suspects this might be an early indicator that enhanced transparency is prompting some independents to push their prices up, rather than compelling the larger operators to bring theirs down. His greatest worry, though, centres on what these changes could mean for the survival of smaller practices in the years ahead.
He explained: “The elephant in the room is whether some independent vets decide these additional regulatory pressures are simply the final straw. If more decide to sell up, the most likely buyers will often be the larger corporate groups that already tend to charge higher prices. That could ultimately reduce competition rather than increase it.”
Mr Holmes recognised there were multiple reasons why his fears might prove unfounded. Enhanced consumer price comparison, fiercer rivalry and reduced medication costs could still deliver genuine savings for pet owners. However, he insists the reforms ought to be assessed on their actual outcomes rather than their stated aims.
He continued: “Everyone wants better value and greater transparency for pet owners. The challenge is making sure the reforms don’t accidentally produce the polar opposite result.”
