Shares in CVS Group (AIM:CVSG) plunged 22% after the competition watchdog said it is launching an investigation into the pet medicines and treatment market.
Pet owners are often uninformed of pricing and could be left overpaying for medicines due to failures in the veterinary sector, the Competition and Markets Authority said.
Following a call for information in September, the CMA said on Tuesday that it is launching a formal market investigation over concerns that consumers are not being given enough information on pricing for both medicines and treatment.
Pet owners were often left overpaying for the likes of medicines as a result, while many reported not even being told of costs before treatment, the CMA said.
“We have heard concerns from those working in the sector about the pressures they face, including acute staff shortages, and the impact this has on individuals,” CMA boss Sarah Cardell said.
“But, our review has identified multiple concerns with the market that we think should be investigated further.”
Weak competition was also a concern, the CMA said, with Pets at Home among just six companies which now own 1,500 of the UK’s 5,000 veterinary practices.
Such large groups may have incentive to act in ways which reduce competition and weaken competition, the CMA warned.
Some 45,000 members of the public responded to the CMA’s call for input, alongside 11,000 workers from the industry.
“The unprecedented response we received from the public and veterinary professionals shows the strength of feeling on this issue,” Cardell said.
“We have provisionally decided to launch a market investigation because that’s the quickest route to enable us to take direct action if needed.”
Pets at Home PLC, which has a vet arm, slipped 6.6% in early trading but eased to a 2% decline later in the morning.