Tag: rip-off

Watchdog identifies ‘multiple concerns’ in veterinary industry

The CMA has today published its main concerns following an initial review into the veterinary sector

  • CMA provisionally decides it should launch a formal Market Investigation.
  • Initial review prompts over 56,000 responses from public and vet industry.

The review by the Competition and Markets Authority (CMA) highlights multiple concerns in the market, including:

  • Consumers may not be given enough information to enable them to choose the best veterinary practice or the right treatment for their needs.
  • Concentrated local markets, in part driven by sector consolidation, may be leading to weak competition in some areas.
  • Large corporate groups may have incentives to act in ways which reduce choice and weaken competition.
  • Pet owners might be overpaying for medicines or prescriptions.
  • The regulatory framework is outdated and may no longer be fit for purpose.

The CMA has provisionally decided that it should launch a formal Market Investigation focused on its provisional analysis of the issues in the sector and is now consulting on this proposal.  

A Market Investigation enables the CMA to investigate its concerns in full and to intervene directly in markets if it finds that competition is not working well. Along with compelling those under investigation to provide information, it gives the CMA access to a wide range of legally enforceable remedies, such as mandating the provision of certain information to consumers, imposing maximum prescription fees and ordering the sale or disposal of a business or assets.

Sarah Cardell, Chief Executive of the CMA, said: “We launched our review of the veterinary sector last September because this is a critical market for the UK’s 16 million pet owners. The unprecedented response we received from the public and veterinary professionals shows the strength of feeling on this issue is high and why we were right to look into this.

“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 individual professionals. But our review has identified multiple concerns with the market that we think should be investigated further.

“These include pet owners finding it difficult to access basic information like price lists and prescription costs – and potentially overpaying for medicines. We are also concerned about weak competition in some areas, driven in part by sector consolidation, and the incentives for large corporate groups to act in ways which may reduce competition and choice.

“Given these strong indications of potential concern, it is time to put our work on a formal footing. We have provisionally decided to launch a market investigation because that’s the quickest route to enable us to take direct action, if needed.”

The CMA’s concerns

Based on the evidence gathered so far, the CMA has 5 key concerns that it proposes to investigate further:

Consumers may not be given enough information to enable them to choose the best veterinary practice or the right treatment for their needs.

  • Most vet practices do not display prices on their website – of those practices checked, over 80% had no pricing information online, even for the most basic services. Pet owners tend not to shop around between vet practices and assume prices will be similar, although that is not always the case.
  • People are not always informed of the cost of treatment before agreeing to it – around one fifth of respondents to the  CFI said that they were not provided with any cost information before agreeing to tests, around one in 10 said they were not provided with cost information before their pet had surgery, and around half said they were not informed about costs before agreeing to out of hours treatment.
  • A company can own multiple vet practices in a local area without making that clear – for example, only 4 out of 6 of the largest groups don’t change the name or branding when they take over an independently owned vet practice. This means pet owners are not always comparing competitors when choosing a vet practice.

Concentrated local markets, in part driven by sector consolidation, may be leading to weak competition in some areas.

Market concentration measures how many competitors operate in a particular market – the fewer firms operating in a market, the more concentrated it is.

  • In 2013, around 10% of vet practices belonged to large groups, but that share is now almost 60%, and many of the large groups have expressed an intention to continue expanding their business through acquisition of independently owned practices.
  • To illustrate this another way, since 2013 1,500 of the 5,000 vet practices in the UK have been acquired by the 6 large corporate groups (CVS, IVC, Linnaeus, Medivet, Pets at Home and VetPartners).
  • This may reduce the number of business models in locations where most or all of the first opinion practices are owned by one large corporate group, giving less choice to consumers because they tend to choose practices close to home.

Large integrated groups may have incentives to act in ways which reduce choice and weaken competition.

Given the significant and ongoing growth of large corporate groups, the CMA is concerned that:

  • The large, integrated corporate groups (especially those whose business models include significant investment in advanced equipment) may concentrate on providing more sophisticated, higher cost treatments, meaning that consumers are less able to access simpler, lower cost treatments even if they would prefer that option.
  • To varying extents, the large vet groups have also bought businesses which offer related services such as specialised referral centres, out of hours care, diagnostic labs and/or crematoria. These large groups may have the incentive and ability to keep provision of these related services within the group, potentially leading to reduced choice, higher prices, lower quality and exit of independent competitors.

Pet owners might be overpaying for medicines or prescriptions.

  • Vets must use signs in reception or treatment rooms to tell customers that they can get a prescription for medicine and buy it elsewhere, but the CMA is concerned that these may not be effective. While it can be convenient to buy a medicine directly from the vet as part of a consultation, around 25% of pet owners did not know that getting a prescription filled elsewhere was an option – meaning they are missing out on potential savings, even with the prescription fee.
  • Some vet practices may make up to a quarter of their income selling medicines – so there may be little incentive to make pet owners aware of alternatives.
  • The current regulatory regime may contribute to concerns by restricting veterinary practices’ ability to source cheaper medicines online.

The regulatory framework is outdated and may no longer be fit for purpose.

  • The main regulation in the industry dates from 1966, before non-vets were able to own vet practices. It relates to individual practitioners, not practice owners or vet practices as businesses. This means that the statutory regulator, the RCVS, has limited leverage over the commercial and consumer-facing aspects of veterinary businesses, for example how prices are communicated or whether there is transparency about ownership of vet practices or related services.
  • The RCVS has put in place a Practice Standards Scheme which applies to the vet practice rather than individual vets. Only 69% of eligible practices have signed up to this voluntary scheme, meaning that almost a third of the market has not committed to this approach.
  • The provisional view is that outcomes for consumers could be improved if regulatory requirements and/or elements of best practice could be monitored or enforced more effectively.

Next steps

The CMA has launched a 4-week consultation to seek views from the sector on the proposal to launch a market investigation. The consultation closes on 11 April 2023 at which point it will consider the responses received and a decision will be made on how to proceed.

For further information visit the veterinary services case page. This includes the consultation document which sets out more details and statistics on today’s update.

A response from the British Veterinary Association to follow

Petrol Prices: Government acts to tackle rip-off retailers

  • Retailers will be forced to provide up-to-date price information as part of new government scheme to call out rogue supermarkets and stations overcharging drivers at the pump.
  • Motorists will be able to easily compare fuel prices in real time to choose the best prices whilst boosting competition and in turn driving down prices.
  • Government action after watchdog finds some supermarkets charged drivers 6p more per litre for fuel from 2019 to 2022 – meaning £900m in extra costs across the UK in 2022 alone.

Motorists are being put in the driving seat to find the best fuel prices as the government prepares to force retailers to publicly fess up to how much they are charging at the pump.

In a win for consumers, they will be able to compare prices in real time in any area of the UK, through a new fuel price reporting scheme. Drivers will be able to easily identify those charging fair prices and those failing to pass on savings from falling wholesale costs.

The government will change the law to force retailers to comply by providing up to date price information, which is expected to lead to greater transparency and competition – in turn driving down prices and easing people’s cost of living.

The new scheme will make pricing data available for third parties – paving the way for them to create price comparison apps and websites – supporting the digital economy and helping growth.

The tough action by government follows publication of a Competitions and Markets Authority (CMA) report today showing some supermarkets charged drivers 6p more per litre for fuel. This amounts to £900m in extra costs in 2022 alone – around £75m a month.

New powers will be handed to a public organisation yet to be decided, to closely monitor the UK road fuel market, scrutinise prices and alert government if further intervention is needed.

This is the latest step in the government’s action to ease the cost of living, as part of its efforts to halve inflation this year – one of the Prime Minister’s five priorities. It follows the Chancellor’s roundtable with regulators last week, including the CMA, to ensure consumers are being treated fairly and help those struggling to make payments.

Grant Shapps, Energy Security Secretary, said: “Some fuel retailers have been using motorists as cash cows – they jacked up their prices when fuel costs rocketed but failed to pass on savings now costs have fallen.

“It cannot be right that at a time when families are struggling with rising living costs, retailers are prioritising their bottom line, putting upwards pressure on inflation and pocketing hundreds of millions of pounds at the expense of hardworking people.

“Today I’m putting into action the CMA’s recommendations and standing by consumers – we’ll shine a light on rip-off retailers to drive down prices and make sure they’re held to account by putting into law new powers to increase transparency.”

Jeremy Hunt, Chancellor of the Exchequer, said: “It isn’t fair that businesses are refusing to pass on lower prices to protect their profits while working people struggle with balancing their budgets.

“Consumers need to be treated fairly, and so we’re empowering drivers to find the best prices possible for their fuel by taking swift steps following the CMA’s recommendations.”

The CMA’s report found a concerning weakening of competition in the fuel market and an overall increase in retailers’ margins, especially in respect of diesel and with supermarkets the worst offenders (see below).

It also noted a lack of reliable and comprehensive price information available to motorists.

The report recommends the mandatory public disclosure of fuel prices and establishment of a body to monitor the market, which the government has agreed to.

The government will consult on the design of the open data scheme, and market monitoring function this autumn – with changes to the law needed to bring it in. In the interim, the CMA will create a voluntary scheme encouraging fuel retailers to share accurate, up-to-date road fuel prices for publication by August and continue to monitor fuel prices using its existing powers.

The move follows a similar scheme in Germany, which boosted competition amongst fuel retailers. Meanwhile, motorists who shopped around in Queensland, Australia, saved on average $93 per year off the back of a statewide scheme rolled out in the area.

Action to protect consumers announced today follows the government spending nearly £40 billion protecting households and businesses from spiralling energy bills over the colder months – including paying half the typical household bill and saving the average home roughly £1,500 by the end of June.

Meanwhile, with the latest Ofgem price cap coming into effect from 1 July, families will see their yearly energy bills fall by around £430 on average. On top of this, the government is also providing additional support to the most vulnerable, with an extra £150 for disabled people and £900 for those on means-tested benefits.

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CMA sets out plan to help drivers get more competitive fuel prices

A new fuel finder scheme to enable drivers access to live, station-by-station fuel prices on their phones or satnavs would help revitalise competition in the retail road fuel market, the CMA said yesterday

  • Increased supermarket fuel margins led to drivers paying an extra 6 pence per litre
  • Instant access to prices via fuel finder scheme should drive down prices and help people find cheapest fuel
  • New monitoring body needed to hold industry to account
  • Asda fined £60,000 for failure to provide information when required

The scheme would be made possible by new compulsory open data requirements and backed by a new ‘fuel monitor’ oversight body. The proposals are the key recommendations by the Competition and Markets Authority (CMA) to UK government following its in-depth study into the road fuel market which found a weakening of competition in retail since 2019.

At present, retailers only provide information on prices at the petrol stations themselves. This makes it hard for drivers to compare prices and weakens competition. The fuel finder open data scheme would need statutory backing through legislation to ensure fuel retailers provide up-to-date pricing and make that available to drivers in an open and accessible format that can be easily used by third party apps such as satnavs or map apps, through a dedicated fuel finder app, or a combination of both.

The fuel monitor would monitor prices and margins on an ongoing basis and recommend further action if competition continues to weaken in the market. As the UK transitions to net-zero the demand for petrol and diesel will reduce. The fuel monitor will help us understand the impact of this on vulnerable consumers that remain dependent on petrol and diesel for longer, as well as those living in areas with limited choice of fuel stations.

The fuel monitor will ensure ongoing scrutiny of retail prices for petrol and diesel. We observed that following the interim update issued by the CMA in May 2023, the average price of road fuel fell in large parts of the UK. Over the last year, the CMA has investigated the road fuel market in detail and reached the conclusion that competition is not working well and greater transparency in pricing is needed to improve consumer confidence and bring down prices for drivers.

There is no evidence to suggest that there has been cartel behaviour taking place and the CMA has no plans to open an enforcement case.

The report found that:

  • From 2019-22, average annual supermarket margins have increased by 6 pence per litre (PPL)
  • Increased margins on diesel across all retailers have cost drivers an extra 13 PPL from January 2023 to the end of May 2023
  • With greater transparency and shopping around as effectively as possible, the driver of a typical family car could save up to £4.50 a tank within a 5-minute drive
  • Motorway service stations are charging around 20 PPL more for petrol and 15 PPL more for diesel compared to other fuel stations

Supermarkets are generally the cheapest places to buy fuel, with Asda typically the cheapest of those. This has anchored prices in the past. The CMA found that in 2022, Asda and Morrisons each made the decision to target higher margins.

Asda’s fuel margin target in 2023 was more than three times what it had been for 2019, while Morrisons doubled their margin target in the same period. Other retailers, including Sainsbury’s and Tesco, did not respond in the way you would expect in a competitive market and instead raised their prices in line with these changes. Taken together this indicates that competition has weakened and reinforces the need for action.

Diesel prices have been slow to drop in 2023, partially down to Asda ‘feathering’ (reducing pump prices more slowly as wholesale prices fell) its prices and other firms not responding competitively to that. As a result, the CMA estimates that drivers have paid 13 PPL more for diesel from January 2023 to the end of May 2023 than if margins had been at their historic average.

Sarah Cardell, Chief Executive of the CMA, said: “Competition at the pump is not working as well as it should be and something needs to change swiftly to address this.

“Drivers buying fuel at supermarkets in 2022 have paid around 6 pence per litre more than they would have done otherwise, due to the four major supermarkets increasing their margins. This will have had a greater impact on vulnerable people, particularly those in areas with less choice of fuel stations.

“We need to reignite competition among fuel retailers and that means two things. It needs to be easier for drivers to compare up to date prices so retailers have to compete harder for their business.

“This is why we are recommending the UK government legislate for a new fuel finder scheme which would make it compulsory for retailers to make their prices available in real time. This would end the need to drive round and look at the prices displayed on the forecourt and would ideally enable live price data on satnavs and map apps.

“Given the importance of this market to millions of people across the UK this needs to be backed by a new fuel monitor function that will hold the industry to account. As we transition to net zero, the case for ongoing monitoring of this critical market will grow even stronger, so we stand ready to work with the UK government to implement these proposals as quickly as possible.”

Local factors also contribute to how much drivers pay at the pump. The CMA identified that there are significant price differences in local areas, and that the difference between the highest and lowest prices in local areas has increased as average fuel prices have risen.

Lower prices are typically associated with having a supermarket retailer nearby, and where there are no supermarkets, for example, in remote areas, fuel retailers are likely to have higher costs and prices are likely to be higher. The fuel finder scheme will be important to help people find the best deal possible but it is essential that the monitoring function keeps a close eye on local variations in prices.

The price premium at motorway service stations has grown in real terms since 2012, and price variation on motorways is low, due to limited competition between service stations. A fuel finder scheme would allow drivers an easy way to see where they can find cheaper fuel in the area if they come off the motorway.

The CMA has also imposed fines totalling £60,000 on Asda for failing to provide relevant information in a timely manner.

Asda received two fines, each of £30,000 (the statutory maximum), for:

  • Sending a representative to attend a compulsory CMA interview who was not equipped to provide evidence on certain topics the CMA had identified in advance.
  • Failing to respond completely to a compulsory written request for information.

Asda has now provided the CMA with the required information.

The final report on the Road Fuel Market Study is available to read in full.

RAC Foundation: Lack of competition pushing up pump prices

Supermarkets not as competitive as they once were

night shot of a petrol station

Fuel retailers have been pushing up their margins on pump prices meaning higher prices for drivers.

The latest findings from the Competition and Markets Authority (CMA) reveal that between 2019 and 2022 supermarkets pushed up their margins on petrol and diesel by 6p per litre (PPL).

The CMA also found that “increased margins on diesel across all retailers have cost drivers an extra 13 PPL from January 2023 to the end of May 2023.”

The organisation goes on to say:

“Over the last year, the CMA has investigated the road fuel market in detail and reached the conclusion that competition is not working well and greater transparency in pricing is needed to improve consumer confidence and bring down prices for drivers.”

However, the CMA could find “no evidence to suggest that there has been cartel behaviour taking place and the CMA has no plans to open an enforcement case.”

The CMA’s study on road fuel prices identified a reduction in competition amongst the supermarkets:

“Supermarkets are generally the cheapest places to buy fuel, with Asda typically the cheapest of those. This has anchored prices in the past. The CMA found that in 2022, Asda and Morrisons each made the decision to target higher margins. Asda’s fuel margin target in 2023 was more than three times what it had been for 2019, while Morrisons doubled their margin target in the same period.

“Other retailers, including Sainsbury’s and Tesco, did not respond in the way you would expect in a competitive market and instead raised their prices in line with these changes. Taken together this indicates that competition has weakened and reinforces the need for action.

“Diesel prices have been slow to drop in 2023, partially down to Asda ‘feathering’ (reducing pump prices more slowly as wholesale prices fell) its prices and other firms not responding competitively to that. As a result, the CMA estimates that drivers have paid 13 PPL more for diesel from January 2023 to the end of May 2023 than if margins had been at their historic average.”

The CMA is calling for the compulsory release of price data by fuel retailers so that apps can be developed which allow drivers to check what is the best price in their local area.

It also wants to see a new monitoring body to hold the industry to account.

According to the CMA “motorway service stations are charging around 20 PPL more for petrol and 15 PPL more for diesel compared to other fuel stations.”

Oil prices crashing again, but pump prices still at dishonestly rip-off levels

  • WTI (West Texas intermediate) oil prices plunge 50% to $8.75 a barrel, lowest level since December 1973. Brent could follow too, eventually.
  • Even before Monday’s crash in oil price, UK’s fuel supply chain has dishonestly held back March’s massive wholesale falls from filling up at the pumps.
  • Petrol should be 98p and Diesel 106p per litre, instead it is averaging 10p higher.

Howard Cox, founder of FairFuelUK Campaign, said: “Even with 70% less fuel being sold, the dishonesty from these faceless businesses, using the Coronavirus crisis as a smokescreen to maintain their profits, beggars belief.

“A few hoodwinked MPs have responded to FairFuelUK’s concerns for 37m drivers. They say they believe that the most effective way to keep fuel prices down is through an open and competitive market. In 2013, the Office for Fair Trading investigated competition in the UK fuel sector and concluded that it was operating well.

“That is absolute claptrap. That enquiry was an utter whitewash and everyone knows it had the smell of big business manipulating the result.

“It’s time the Government really looked after the highest taxed drivers in the world and our vital haulage industry, and introduce PumpWatch as a matter of emergency. An independent pricing watchdog is vital to protect our economy and allow essential workers to fill up their vehicles with the fairest and most honest prices at the pumps.”

For the latest Oil, wholesale and pump prices and how motorists are being fleeced by the fuel supply chain, especially more so during the Coronavirus crisis go to:

https://fairdriving.uk/greedy-oil-companies-continue-to-exploit-co-vid-19-crisis

Coronavirus crisis being used as an excuse to fleece motorists at the pumps?

15 pence per litre of Wholesale falls being held back from drivers despite 50% drop in the Oil Price.

Since Christmas to March 13th:

  • Oil has fallen by 89% in Sterling
  • Fuel supply chain businesses have increased profit from drivers when they fill up, by 242% for petrol and 175% for diesel.
  • Wholesale petrol has fallen 24% yet retail has only fallen 1%
  • Wholesale diesel has fallen 19% yet retail has only fallen 3%
  • Since Christmas, the Average family car is paying £8.25 more to fill up their tank than necessary.

Since March 3rd to March 13th:

  • Oil has fallen by 50% in Sterling
  • Fuel supply chain businesses have increased profit from drivers when they fill up, by 95% for petrol and 69% for diesel.
  • Wholesale petrol has fallen 15% yet retail has not changed
  • Wholesale diesel has fallen 8% yet retail risen by 1%
Petrol and diesel should now be at least 15 pence/litre lower at the pumps.

Howard Cox, Founder of FairFuelUK Campaign said: “The faceless fuel supply chain does it again, this time using a national crisis to line their already fat wallets.

“The Government must act now by putting in place a fuel pricing monitoring watchdog. The perennial cheating of the world’s highest taxed motorists, everytime oil prices change, must be scrutinised by an independent PumpWatch body. It borders on criminal behaviour.”

Data Analysis: https://www.fairfueluk.com/CoronaVirusPumpPrices.png

Data Source: FairFuelUK PumpWatch, Portland Analytics, RAC Foundation

Insurance: customers paying the price for loyalty … or laziness?

Savings to be made by shopping around

The Financial Conduct Authority (FCA) has published the interim report of its market study into the pricing of home and motor insurance. The FCA found that competition is not working well for all consumers in these markets. It sets out concerns about how pricing in these markets leads to consumers who do not switch or negotiate with their provider paying high prices for their insurance.

Continue reading Insurance: customers paying the price for loyalty … or laziness?