In the News Teaching Activity – are pet owners being ripped off at the vets? (Mar 2024)

The Competition and Markets Authority (CMA) is launching an investigation to the pet medicine pricing practices, particularly those owned by big corporations because it looks as if pet owners are being exploited.

The CMA has found that over 80% of veterinary practice websites lack clear pricing information, potentially leading pet owners to overpay significantly for medical treatments for their much-loved pets. A lack of pricing transparency appears to be resulting in huge financial burdens for some pet owners, as illustrated by cases of high upfront costs for pet care. The CMA has also highlighted concerns about corporate ownership dominating the industry which limits consumer choice. The vets argue they put animal welfare first, but do their corporate owners do the same? The proposed CMA market investigation aims to address these issues and ensure fair pricing and transparency for the veterinary sector in future.

Warning pet owners could be overpaying for medicine - BBC News

1 How has the rise in pet ownership during the COVID-19 pandemic impacted the economic dynamics of the veterinary industry, as mentioned in the article?

2 What are the potential economic implications of the lack of pricing transparency and information asymmetry identified by the CMA in the veterinary sector? Try drawing diagram showing how the information gap may cause a misallocation of resources.

3 How does the increasing corporate ownership of veterinary practices affect market competition, consumer choice, and potentially pricing strategies within the industry, as discussed in the article? Try drawing a diagram showing how monopoly power can lead to higher prices.