Inquiry is about competition not animal welfare

“I sincerely hope that few clients will take up the option of online buying, but if they do then this creates a business opportunity for more practices Why should ownership have become so concentrated? Because investors in what became large veterinary groups recognised two basic characteristics of the sector: demand for the services of veterinarians by pet owners is price inelastic and income elastic. In plain language, pet owners care so much about their animals that typically they go on paying to look after them even when the price of doing so increases substantially. Also, when owners' disposable income increases, they choose to spend more of the increment on pets. For commercial institutions whose main objective is making money, those characteristics are a strong incentive to invest in the sector. Another consequence is that by consolidating independent veterinary practices, new owners gain market share. Then above-normal profits can be extracted by increasing prices charged to pet owners. All the foregoing is elementary economics, and an explanation of what happens when competition within any sector is reduced. Observations made by Rob Williams and Liz Mullineaux on the BVA's recent webinar on the CMA's provisional decisions (https://bit.ly/3LNvaeG) – that animal welfare was not the CMA's first consideration, its focus instead was on transactions within the sector – invite particular comment. That is precisely as it should be. Society takes a view on how we should, and do, treat animals, pet owners and the veterinary profession especially. Inevitably, decisions must follow about arrangements most conducive to achieving the best possible outcomes from available resources. Consider, as one example, the implications of market concentration for people wanting to keep a pet. We know pets are good for people; evidence abounds for the physical and emotional benefits they bring. But if the price of pet keeping is excessive, that is a disincentive to do so. Bring down the price and pet ownership becomes feasible for more people, especially those on low incomes who could benefit from a pet companion – elderly and socially isolated people, the infirm or unemployed. Paying more than is strictly necessary for veterinary services and medicines does not equate to higher animal welfare. Inventories held by animal charities testify in part to the gap between people's willingness to pay and ability to pay for rehoming. Economists obsess about competition because it is well established as the market arrangement best equipped to serve the interests of both suppliers (here, veterinarians) and consumers (pet owners). Transparency and access to information are key. Competition means that no supplier can extract higher profits than is their due, or consumers pay more than they need. In that sense, the system is fair. From the perspective of this impartial economist, long concerned with animal health and welfare, the CMA investigation was never about the skills and dedication of veterinarians. Sometimes, perhaps erroneously, it has seemed vets felt insecure because they interpreted part of the CMA's role to be judgemental that way. Such aspects are beyond the CMA's competence. What is not, is possession of expertise to investigate implications of market structure in veterinary provision for household pets, and to recommend how it can be improved.