Mars will soon dominate corporate-owned pet hospitals with the purchase of the animal-hospital chain VCA Inc., that was announced Monday. Mars already owns Banfield Pet Hospital and BluePearl Veterinary Partners, as well as several pet food brands. Its combined marketplace clout is not expected to exceed 10 percent of the veterinary market after the merger.
There will be a loud buzz at upcoming veterinary conferences as animal health pros try to predict the impact of this agreement. Remember, the core of the animal health business is trust and dependability. This bodes well for the independent practice or the small affiliated practice groups. The centralization of core business functions is certain to impact cost centers and in turn, the cost of services to pet owners.
Source: Bloomberg, January 9, 2017.
It’s a fast-growing industry and they (Mars) obviously see an opportunity for that synergy,” said Ken Shea, analyst at Bloomberg Intelligence.
Also see:
- Why taking your pet to the vet is more expensive than ever, Marketplace podcast, January 5, 2017
- The High-Cost, High-Risk World of Modern Pet Care, Bloomberg Business Week, January 5, 2017
INSIGHTS: When we compare these events with the human health markets, it is important to celebrate that animal health does not have to contend with a third-party pay dynamic driven by health insurance companies. Pet insurance policies are used most to manage risks or to meet pet owners’ cash flow concerns. To some extent, it is good to have outside money investing in animal health to help our industry move forward and diversify the services we provide to animal owners.