REG - Competition and Mkts - Merger Update: VetPartners/Goddard

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28/04/2022 14:15

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RNS Number : 7398J  Competition and Markets Authority  28 April 2022

 

 

THURSDAY 28 APRIL 2022

VetPartners' purchase of Goddard raises competition concerns

 

VetPartners' completed purchase of Goddard could now be referred for an
in-depth investigation after finding that the deal raises competition
concerns.

 

The Competition and Markets Authority (CMA) opened its investigation into
VetPartners Limited's purchase of Goddard Holdco Limited, which trades as
Goddard Veterinary Group, in March 2022. Both firms are providers of
veterinary services. VetPartners, owned by the private equity firm BC
Partners, operates approximately 550 sites across the UK, while Goddard, a
family-owned business, operates 47 sites in Greater London.

 

As with the CMA's recent investigation into
(https://www.gov.uk/cma-cases/cvs-slash-quality-pet-care-merger-inquiry) CVS's
purchase of The Vet
(https://www.gov.uk/cma-cases/cvs-slash-quality-pet-care-merger-inquiry) ,
this deal takes place against a backdrop of a small number of corporate
groups, including VetPartners, buying up large numbers of independent
practices and local chains of vets across the UK. The CMA has received a
number of complaints in recent years about higher prices or lower quality
services as a result of multiple vets' practices in the same local area being
owned by a single company. VetPartners, like most of these corporate groups,
not only owns and operates local vet practices, but also has broader
activities within the veterinary sector, owning other businesses including
diagnostic laboratories, locum agencies, and crematoria.

 

Following its Phase 1 investigation into VetPartners' acquisition of Goddard,
the CMA has found that the merger raises competition concerns in 11 local
areas across Greater London.

 

The CMA's investigation found that the combined businesses would account for a
significant proportion of veterinary services in each of these areas. While
veterinary practices owned by VetPartners and Goddard currently compete for
customers at each of these locations, the CMA is concerned that the combined
businesses would not face sufficient competition after the merger. This could
lead to pet owners facing a worse quality of service, including more limited
treatment options, or having to pay higher prices.

 

Colin Raftery, Senior Director of Mergers, at the CMA, said:

 

"Close to 60% of UK households own a pet and, when veterinary care is needed,
the cost of care can have a significant impact on already-stretched household
budgets.

"Like CVS's recent acquisition of The Vet, VetPartners' acquisition of Goddard
would result in too many vets' practices in the same area being under the
control of a single company, raising the risk of higher prices or lower
quality services.

"Unless our concerns are addressed, we will refer this deal for an in-depth
investigation to ensure that pet owners don't lose out."

VetPartners has 5 working days to offer legally-binding proposals to the CMA
to address the competition concerns identified. The CMA would then have a
further 5 working days to consider whether to accept these instead of
referring the case to a Phase 2 investigation.

For more information, visit the VetPartners / Goddard merger inquiry case
page.
(https://www.gov.uk/cma-cases/vetpartners-limited-slash-goddard-holdco-limited-merger-inquiry)
 

 

Notes to Editors

1.   VetPartners refers to VetPartners Limited, and Goddard refers to
Goddard Holdco Limited, which trades as Goddard Veterinary Group.

2.     Following a Phase 1 review, the CMA has found that VetPartners'
acquisition of Goddard gives rise to a realistic prospect of substantial
lessening of competition (SLC) in the local areas around 11 practices acquired
by VetPartners, all located in Greater London, primarily in the north-east
London area.

3.   The information available to the CMA indicates that the combined
businesses of the VetPartners and Goddard would provide more than 30% of all
veterinary services in each of these 11 local areas.

4.   The CMA served an initial enforcement order in November 2021 requiring
the companies to operate independently, as they did before the purchase. The
order remains in force. Details of the order can be found on the VetPartners /
Goddard merger inquiry case page.
(https://www.gov.uk/cma-cases/vetpartners-limited-slash-goddard-holdco-limited-merger-inquiry)

5.   The CMA's investigation focused on the provision of commercial
veterinary services to small animals (including cats, dogs and other pets),
and excluded services for equine and farm animals (horses and livestock); the
CMA's investigation also excluded out of hours services, referral services,
home visit and telemedicine vets, as well as non-commercial practices in the
market, such as charities.

6.   The Pet Food Manufacturer's Association found in its 2021 Pet
Population report (https://www.pfma.org.uk/pet-population-2021) that 17
million UK households had pets, accounting for approximately 59% of UK
households.

7.   ONS data
(https://www.ons.gov.uk/economy/nationalaccounts/satelliteaccounts/timeseries/adqt/ct)
suggests that in the year leading up to July 2021 consumer spending on vets
and other services for pets was over £4 billion.

8.   This is the second recent merger involving veterinary practices in
which the CMA has identified competition concerns. The CMA found competition
concerns
(https://www.gov.uk/government/news/cvs-takeover-of-the-vet-raises-competition-concerns)
following CVS's purchase of The Vet in February 2022. CVS has since offered to
sell all of The Vet practices it bought to address the CMA's concerns. The CMA
is currently considering whether this offer would address the concerns
identified in that case.

9.   All media enquiries should be directed to the CMA press office by email
on press@cma.gov.uk (mailto:press@cma.gov.uk) , or by phone on 020 3738 6460.

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