FTC’s Concern about Lack of Competition is Requiring Mars to Divest 12 Vet Clinics

By Claudia Kawczynska, September 2017

Earlier this year we reported on Mars’ plans to acquire VCA, for $9.1 billion that would mean that the world's largest pet food company would also own the most vet clinics in the US. It is interesting to see that the Federal Trade Commission (FTC) is charging that this purchase would violate antitrust laws. So Mars had to agree to divest 12 vet clinics, especially those with specialty and emergency services.

The FTC complaint goes on to detail its concerns about how this purchase would affect competition:

According to the FTC’s complaint, if the acquisition takes place as proposed, it may substantially lessen competition for certain specialty and emergency veterinary services in 10 U.S. localities by eliminating head-to-head competition between Mars specialists in the area and those of VCA.

According to the complaint, without a remedy, the acquisition would likely lead to higher prices for pet owners and lower quality in the specialty and emergency veterinary services they receive. These effects are unlikely to be mitigated through timely new entry, as opening a specialty or emergency services veterinary clinic presents some unique challenges, including the need to recruit specialist veterinarians with considerably greater training than general practice veterinarians.

One clinic each in the Kansas City, New York, and Phoenix areas will be divested to National Veterinary Associates. One clinic each in Chicago, Corpus Christi and San Antonio, and two clinics in Seattle, will be divested to Pathway. Two clinics serving the Portland area and two clinics in the greater Washington, DC area will be divested to PetVet.”

These are the veterinary clinics to be divested and their buyers, according to the FTC:

> One clinic each in the Kansas City, New York and Phoenix areas will be divested to National Veterinary Associates.

> One clinic each in Chicago, Corpus Christi and San Antonio, and two clinics in Seattle will be divested to Pathway.

> Two clinics serving the Portland area and two clinics in the greater Washington, D.C., area will be divested to PetVet.

Mars is also prohibited from entering into contracts with any specialty or emergency veterinarian affiliated with a divested clinic for a year after the order takes effect, the release states. Mars is also required for 10 years to notify the FTC if it plans to acquire any additional specialty or emergency veterinary clinics in certain geographic areas. 

More information about the divestiture and consent agreement can be found here. Good to know that the FTC is, in this case, looking out for the interest of pet owners. The commission’s vote to issue the complaint was unanimous. The FTC will publish the consent agreement package in the Federal Register shortly.

Comments can be filed electronically here or in paper form by following the instructions in the “Supplementary Information” section of the Federal Register notice once it’s published.

 

Claudia Kawczynska is The Bark's co-founder and Editor-in-Chief.