Inside the corporate dash to buy up dentists’ offices, vet clinics and pharmacies

[92redragtop]

Been watching this trend over the past 7 years with dental, eyecare, and vet practices as I've seen them buying up independents and creating bigger chains, and have not liked the trend. I still look for independent operations but getting harder to find. Our vet is retiring this month because he didn't want to sell to them and decided to get out of the game (he is older so timing is right), and of the 5 alternative clinics we looked at, 3 are part of these private equity owned chains and 2 are still independent (only one is considering new patients/customers). For our dog's thyroid surgery in last year we had about $2K in diagnotstics/tests done with a few specialists at one of the corporate owned vet hospitals and the interactions didn't sit well with us so we went a different route. The actual surgery and follow-up turned out to be about half the first estimate even when factoring in we had to re-do several of the tests, X-rays, ultrasounds, and neurological consult (we didn't know what the second estimate was but assumed it would be in the ballpark of the first). wasn't about the money but more the "bedside manner", interaction, and just trying to get an empathetic opinion/recommendation (versus an a la carte menu).




Inside the corporate dash to buy up dentists’ offices, veterinary clinics and pharmacies

Fuelled by international private equity funds, consolidating firms have been on a tear in health-professional fields, buying up practices in fields such as veterinary medicine, dental care, optometry and pharmacies and assembling them into chains

GLOBE AND MAIL
CHRIS HANNAY
INDEPENDENT BUSINESS REPORTER
PUBLISHED JUNE 4, 2022
FOR SUBSCRIBERS


Jordyn Hewer had a plan: Go to veterinary school, get a decade of experience under his belt and then buy his own practice.

The first two steps went off without a hitch. He graduated from the University of Montreal’s veterinary school in 2011. He spent the next 10 years working as a small-animal veterinarian in private practices and shelters in Quebec and Ontario.

But it’s when he got to the third step – buying his own practice – that he ran into a serious problem. In the intervening years, the whole industry had changed.
Major corporate players had entered Canada’s veterinary industry, including VetStrategy – backed by U.S. private-equity firm Berkshire Partners, and recently merged with European pet-care chain IVC Evidensia – and VCA Canada, owned by international confectionery giant Mars Inc. The corporate chains were buying up independent veterinary practices, sparking bidding wars that saw the price of vet practices balloon from three or four times annual gross earnings to 10, 20, even 30 times that at the beginning of this year.

The buyouts meant multimillion-dollar paydays for veterinarians who already owned a practice. But for ambitious young professionals like Dr. Hewer, there was no way to compete. Even if he could somehow secure the funding to buy a practice at the prices they were now going for, he would be saddled with a mountain of debt he would struggle to pay off.

“It’s ridiculous,” said Dr. Hewer, who chose to leave the industry to work for a pet-food manufacturer. “When you translate that to how much debt that represents and how much you would need to pay that back in, let’s say, a five- to 10-year period, the numbers never add up.”

Fuelled by international private equity funds, consolidating firms have been on a tear in other health-professional fields as well, buying up practices in fields such as veterinary medicine, dental care, optometry and pharmacies and assembling them into chains. Practitioners who sell to corporate owners typically get back-office support through the firm’s technology and staff, help with marketing, and reduced management responsibilities. The buyers, meanwhile, get businesses with steady streams of revenue, and profits that can be boosted by centralizing equipment and administrative functions, and ordering supplies in bulk. In the vast majority of cases, the old branding remains intact after a purchase happens, so patients and customers have no idea their once-independent practice has been taken over by corporate ownership.

Consolidation within these fields is still relatively low in Canada, but it is building fast – in less than a decade, nearly a quarter of vet practices have been bought by corporate owners.

“I’ve never seen anything like it,” said Douglas Jack, a leading veterinary lawyer at Borden Ladner Gervais LLP. “I’ve been practicing law for 37 years. It just became a frenzy among the consolidators.”

The recent acquisitions are part of a wave of increased activity from private-equity firms across the globe, as they search for new fields to generate yield by consolidating fragmented industries and extracting profits. In Canada, consolidators have spent billions in sectors as varied as waste management and legal software.

The approach has fuelled greater corporate concentration, which critics say will reduce consumer choice and drive up prices by driving down competition. And private-equity’s drive for efficiency could also affect the quality of care, for example by reducing the time a professional can spend on procedures.
In countries where the trend is further along – such as the United States and Britain – some government bodies and regulators are raising concerns that corporate concentration is leading to unfair prices and unreliable care.

“What regulators need to start thinking about is when smaller deals accumulate to the point where a market concentration problem develops, either locally or nationally,” said Jon Shell, managing director of Social Capital Partners, and a veteran of the vet industry in Canada and Australia. “That can be bad for employees and consumer choice. They don’t seem to be looking at these smaller deals at all now, because it’s not a today problem.”

In the past, individual practices were responsible not just for offering health services but for operating business functions, too. Then provincial governments began allowing medical professionals to form corporations, often to access preferential tax treatment. This opened the door to outsourcing administrative services – often by hiving them off into a separate management corporation – and, ultimately, to ownership by for-profit companies. (While most provinces still require that a licensed professional own the medical operations of a practice, corporate buyers can find a workaround that enables them to acquire them. They might employ a licensed professional, for instance, who’s legally eligible to assume ownership of the medical assets.)

For example, Dentalcorp Holdings Ltd., which launched in 2011, has amassed nearly 500 dental practices (about 3 per cent of Canada’s practices) by offering dentists six-to-eight times their office’s annual earnings – about double what had once been the industry’s standard. The dentists are paid out 80 per cent in cash and 20 per cent in Dentalcorp shares.

Graham Rosenberg, chief executive officer of Dentalcorp, said he was drawn to the dental industry because it was highly fragmented and highly profitable.
“If you look at most of the practices we acquire, say $2-million to $2.3-million of revenue on average, they are very profitable,” Mr. Rosenberg said. “They have high margins, low capital expenditure requirements. They are great small businesses. And that’s ultimately the value we ascribe to them.”

Mr. Rosenberg founded Dentalcorp after working for Imperial Capital Ltd., a Toronto-based private-equity firm that invests in consumer businesses, including an optometry chain and a maker of pet food.

Imperial, which owns 7 per cent of Dentalcorp, told The Globe and Mail it was attracted to the dental industry because it offered an essential service that was insulated from the effects of cyclicality and recession.

The largest investor in Dentalcorp – at 41 per cent of shares – is L Catterton Partners, a U.S. private-equity firm with ownership stakes in consumer brands ranging from Birkenstock to Peloton that also made a nine-figure investment in Calgary-based optometry chain FYidoctors in 2020.

Rajan Shah, a principal at L Catterton and a Dentalcorp board member, said the firm’s aim is to improve and “consumerize” the patient experience, for example by upgrading a clinic’s technology so they can offer virtual appointments and online booking. “That’s where we believe we can drive value for everyone: physicians, patients and shareholders,” he said.

One risk of this model is that, in most cases, the roll-up companies rack up large debts during their acquisition sprees. Even after a public offering that raised $950-million, which went to paying down the cost of its acquisitions, Dentalcorp still had $752-million in debt remaining, according to a Bank of Montreal research note.

Neighbourly Pharmacy Inc., another roll-up company backed by private equity that went public last year, expects to have 271 pharmaceutical locations across Canada once a $435-million acquisition of Regina-based Rubicon Pharmacies is completed. The merger triggered an automatic review by the Competition Bureau because of its size. (The bureau said it could not share details of the review for confidentiality reasons. In a previous review of the pharmacy industry, the bureau said that standardized pricing could lead to collusion among businesses, which would drive up prices for consumers.)

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Many of Neighbourly’s locations are in rural areas or in First Nations, where there may only be one or two pharmacies servicing a community, said CEO Chris Gardner.
“There may not be a lot of pharmacists that may be willing to buy in smaller markets and smaller communities across Canada,” Mr. Gardner said.

Sandra Hanna, who runs a pharmacy in Guelph, Ont., and heads the Neighbourhood Pharmacies industry group, said that, as in other sectors, the rising costs of goods and labour have made it challenging for pharmacists to run their own business.

She said an extra challenge that her industry faces is that revenue can be constrained because the price of drugs is heavily regulated.

“There are increasing pressures on the pharmacy business model, which are forcing pharmacies to seek those bigger groups, and support from a banner or a head office,” Ms. Hanna said. “It’s one of the few industries where costs continue to increase, but reimbursement does not.”

Dentalcorp and Neighbourly have attracted major institutional investment, including from Manulife Asset Management and the OPSEU Pension Trust.

But some in the industry aren’t sure the acquisition frenzy can last.

Mr. Jack, who provides legal advice for independent and corporate veterinarians, said he’s been part of deals in Quebec earlier this year where retiring professionals sold their practices for 28 times earnings before interest, taxes, depreciation and amortization (EBITDA).

“This is unsustainable,” he said. “Your return-on-investment isn’t going to meet the investment objectives of your private equity investors or the bank. Eventually someone is going to say, stop the madness.”

He said he has talked to leaders at the consolidators who say they feel pressure to maintain the pace of growth.

“In my discussions with them, I say: ‘You do realize that these valuations are unsustainable, right? You know that, right?’” Mr. Jack said. “They say, ‘oh yeah, we know that.’ … Well then why did you do it? And I found their response very interesting. ‘It’s because we have to.’”

Large corporate chains insist their ownership has no impact on the medical decisions being made at their clinics.

A corporate partner interfering with the independent decision-making of a veterinarian “would be problematic,” said Jan Robinson, registrar and CEO of the Ontario College of Veterinarians. “I can tell you, honestly, there are rumours that go around that that takes place. We’ve never seen any evidence of that.”

Even if a corporate owner stays out of the conversations between a medical professional and a client, there are other ways they may have an effect.

Veterinarian Mike Mossop worked for two practices in Ottawa that got bought by VCA Canada. Eventually, he became medical director of one clinic. He left in 2017 to start his own mobile practice because, in part, he said, he began to chafe under corporate ownership.

“There was never anything so blunt in terms of, this is how you should practise,” Dr. Mossop said. “But there is a way they kind of controlled the way you practised indirectly. What I mean by that is kind of controlling certain pricing.”

He said that prices were set by the head office, and standardized across locations in a region. As a result, veterinarians’ decision-making was sometimes swayed by prices.
“It wasn’t direct control, they weren’t saying, use product A over product B, but if they priced it in a certain way, we would always recommend product A,” Dr. Mossop said.

He also said the computer systems that were brought in made it more difficult to offer the discounts some veterinarians opted to offer to customers who otherwise couldn’t afford them.

VCA Canada said it allows “reasonable” discounting in special circumstances, or with the permission of a regional manager. The company said it also runs a charity to provide care for pets whose owners are in dire straits.

“Our prices are higher than some clinics, but are very reasonable given the standard of care,” said Daniel Joffe, VCA Canada’s vice-president of medical operations.

The influence of pricing on decisions has also shown up in academic literature. A European survey of veterinarians in Britain, Austria and Denmark published last year found a little over half of the veterinarians surveyed in Britain – where corporate concentration is very high – said they were allowed to discount fees, while nearly all respondents in the other countries were allowed to give discounts.

Veterinarian Malgosia Mosielski spent most of the past three years in Ottawa as a locum veterinarian, meaning that she did supply shifts at local vet offices, including some that were corporately owned.

She said she never saw owners interfere with medical decisions. But what she did see were unhappy veterinarians and technicians who felt they were being pushed to maintain maximum productivity.

“There’s a lot of pressure on them to do appointments constantly,” Dr. Mosielski said.

For example, some technicians said they were told they only had 30 minutes to prepare for a surgery, instead of the 45 minutes they were used to. During the prep time, technicians would make sure tools were sterilized, set up equipment such as a tracheal tube, and do bloodwork. She said that without the extra prep time, technicians would have to choose between coming in early and doing the work unpaid, or trying to rush to fit in all the necessary tasks before surgery started.

“It’s just frustrating for someone from the outside, who’s never worked in a vet clinic, to come in and say you don’t need 45 minutes for that,” Dr. Mosielski said.

The share of corporate ownership in Canada is growing fast, but in some industries is still relatively low: about 5 per cent of dental offices, about 25 per cent of veterinary clinics and about half of pharmacies, according to the companies that spoke to The Globe.

Most professional associations and regulators told The Globe they did not track ownership statistics. For example, among dental regulators, only two – in Saskatchewan and Prince Edward Island – were able to provide the number of corporate-owned dental practices in their provinces.

But in other countries, where consolidation is further along and watchdogs do keep track, data show the situation can change quickly.


In the United States, corporate ownership of dental practices has grown to 30 per cent. The rate of independent ownership has dropped particularly fast for young dentists, according to the American Dental Association. In 2005, 25 per cent of dentists under 30 owned a practice, as did 55 per cent of dentists between the ages of 30 and 34. In 2021, that dropped to 9 per cent for under-30 dentists and 34 per cent for dentists aged 30 to 34.

At the same time, concern about corporate dental ownership has risen. A U.S. Senate committee investigated the issue in 2013 and heard cases of improper procedures on patients, including children. One disturbing account involved a four-year-old boy who was forcefully held down while two root canals were administered – procedures that were later deemed by a pediatric dentist as unnecessary.

A bipartisan Senate report ultimately slammed the conduct of the companies and said that corporate ownership of dental offices went against the spirit of state laws that said practices must be owned by licensed dentists. (As in Canada, U.S. rules vary by state, but even in those that required full ownership by dentists, corporate chains found a way around it through management agreements.)

A USA Today investigation in 2020, which included the accounts of whistle-blowers, alleged that a chain – North American Dental Group – put pressure on dentists to increase the number of procedures they conducted in order to meet revenue targets. The story included the account of a three-year-old boy in Ohio who was given seven root canals, which other dentists later deemed unnecessary. (After publication of the report, North American Dental Group published a web statement that denied the company put pressure on dentists and said any negative experiences represented a small number of the millions of patients the group saw.)

And, in December of 2021, the Massachusetts Attorney-General sued the Aspen Dental Management Inc. for alleging the chain advertised free dental procedures, and then charged clients afterward and denied many insurance claims from low-income residents. The suit claims Aspen did not live up to an agreement struck in 2014, the last time the company was accused by the state of improper conduct.

Michael Davis, a New Mexico dentist and advocate for independent ownership, said large dental groups are given lenient punishments, such as fines, and then allowed to continue their previous behaviour.

“Nowhere near enough sentencing is being done,” Dr. Davis said.

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Britain has been the prime example of how quickly consolidators in the veterinary sector can move. According to British government statistics, 89 per cent of veterinary offices in the country were independently owned in 2013. Then corporate groups went on a buying spree. By 2021, only 45 per cent of offices were independently owned.

The Competition and Markets Authority (CMA), Britain’s competition regulator, has launched two investigations in recent months of mergers between veterinary chains, because of concerns that the resulting companies would have monopolies in some areas of the country.

“The CMA has received a number of complaints in recent years about higher prices or lower quality services as a result of too many vets’ practices in the same area being under the control of a single company,” Colin Raftery, CMA’s senior director of mergers, said in a statement.

The CMA said, for confidentiality reasons, it could not share specific complaints of price-gouging. But the amount of money spent on pets in Britain has climbed from £2.6-billion (about $4.1-billion) in 2013 to £4-billion in 2021. (For comparison, Statistics Canada said it does not track spending on veterinary services.) A Daily Mail report in 2021 about private ownership of vet practices included a story of a woman who took her cat into a chain-owned after-hours clinic and was charged £220 (about $346) for a consultation – more than six times the previous fee of £34.

One of the chains with a big presence in Britain, IVC Evidensia, merged with Canada’s largest chain, VetStrategy, last year.

Orin Litman, CEO of VetStrategy, said the company is mindful that the competition regulator watches for when one player acquires more than 30 per cent of local market share by buying practices. But he said his understanding is that it is fine for a single practice to take a larger share of the market if it does so organically, by winning over customers from its competitors.

“Whenever we’re in meetings, we’re always looking at our different markets and once you get to 25 per cent, we’re like, okay, let’s leave this market and let’s just focus on providing great service and growing it organically,” he said. “Let’s not look to grow by acquisition or partnership in this market any longer.”

According to consulting firm Aldwych Partners, about a third of local markets in Britain have one chain that owns more than half of the available services.
Aldwych’s Andrew Taylor, who previously worked at the competition regulator, said there were many reasons why spending on vet services has gone up in recent years, such as supply chain issues driving up prices, or wage increases to boost retention.

But he said he’s sure lack of competition has played a role.

“With the amount of market concentration we have here in the U.K., I would be surprised if none of it was attributable to consolidation,” Mr. Taylor said.

Some professionals have another reason for wanting to sell their businesses: The pandemic has made it a very hard time to run a practice.

Mentally, many pharmacists, dentists and veterinarians are burnt out. They performed essential services throughout the pandemic, dealing with stressed and sick patients.

“The strain on the independents is definitely palpable,” said Enid Stiles, a Montreal veterinarian and past president of the Canadian Veterinary Medicine Association.

But, like others in her industry, Dr. Stiles wonders whether something else will be lost in the drive for consolidation.

“I am concerned about the human side, the part that makes us people,” Dr. Stiles said. “Will that change? Will vets become less a part of a community and more a part of a global equity market?”

[StAnger]

Disgusting. Corporatism needs to stop.

[ChickenLips]

the war on small business needs to stop

[Uncle Buck]

There certainly has been a notable change in pet care in Ontario. Clinics are overworked, care and patience for the pets is less. Our clinic still wasn’t allowing owners in the examination room and we’ve noticed our pets have come out sore from exams. This is something we had never seen before. We just left our vet of 20+ years because our pets are developing a real fear of the clinic that wasn’t there before. I don’t know if our vet sold out but something changed and she is talking retirement. I suspect she sold with conditions to stay on for a defined period but she no longer sets policy in the clinic. We’ve also seen several new vets join the clinic but they seem like they are just doing a job and don’t care.

Through a family friend we found a new clinic and so far we’re pleased although it’s an hour from our home.

Don’t even get me started on the emergency pet clinics. Their practices are immoral and borderline illegal.

[ChickenLips]

big box stores, Amazon etc were open during lockdowns. Small businesses were not.

Big box has $$ for influence and tows the line on the narrative.

This is a different flavor of the same Koolaid

[92redragtop]

There certainly has been a notable change in pet care in Ontario. Clinics are overworked, care and patience for the pets is less. Our clinic still wasn’t allowing owners in the examination room and we’ve noticed our pets have come out sore from exams. This is something we had never seen before. We just left our vet of 20+ years because our pets are developing a real fear of the clinic that wasn’t there before. I don’t know if our vet sold out but something changed and she is talking retirement. I suspect she sold with conditions to stay on for a defined period but she no longer sets policy in the clinic. We’ve also seen several new vets join the clinic but they seem like they are just doing a job and don’t care.

Through a family friend we found a new clinic and so far we’re pleased although it’s an hour from our home.

Don’t even get me started on the emergency pet clinics. Their practices are immoral and borderline illegal.

I'm guessing if you saw a change in the practice and care that they went private equity. Our vet still isn't letting people back in with the patients but I guess he's winding down so not bothering about "going back to normal". We got all the vaccines and shots done last week so should be good for a while for those but will likely see the new (still independent) vet in a few months for follow-up blood tests, so hoping we can go in to the clinic and exam room there.

Yeah, not a fan of those emergency clinics either - while they are essential, if you end up at the wrong one they will over-sell you unless you're prepared to ask a lot of questions and push back (but you're at an emotional and informational disadvantage at that point).

[92redragtop]

big box stores, Amazon etc were open during lockdowns. Small businesses were not.

Big box has $$ for influence and tows the line on the narrative.

This is a different flavor of the same Koolaid

Not really - this is just an inevitable result in capitalism and the chase for ROC/ROI. All that is fine as long as the consumer is aware and can vote with their feet/dollars. One gap here is that barriers to entry for medical practitioners are high (ie. regulatory: education, licencing, cost) but the consolidation isn't not being regulated (in fact more or less overlooked until too late). I've seen the eye care and vet sector consolidating into chains since about 2015, especially in the provinces out west but started seeing it in Ontario about 3 years ago.

[ChickenLips]

I'm not sure I would call movement towards monopolies as capitalism.

[92redragtop]

Natural Darwinism in the business ecosystem is part of it, no? Strongest survive and grow and reproduce. Cull the weak and inefficient - This is free market.

[ChickenLips]

Natural Darwinism in the business ecosystem is part of it, no? Strongest survive and grow and reproduce. Cull the weak and inefficient - This is free market.

2 years of regulated closure of small business isn't Darwinism

[5.4MarkVIII]

I’m not surprised to see this in dental or optometry. Since there has been large government movement to socialize these industry’s like healthcare is. Would be windfall profits for anyone owning large groups of these.

Vets on the other hand. Is a bit of a surprise but these venture capital companies only care about making as much money as possible. So if the industry is profitable enough and they can see a large enough profit by buying up major market share then I would not put it past them.

However. What is described in this article. IS NOT CAPITALISM AND IS NOT FREE MARKET!

Claiming so is intellectually dishonest

It’s actual by definition the opposite. This is cronyism and these companies only get away with what they do from major government intervention wether it’s from lobbying, law changing or regulation.

It’s Venture capitalists (deemed “to big to fail”) working with government entities to essentials restrict free market. And make each other rich while doing it. .

[RedSN]

I think I’ve seen this episode on Billions

[92redragtop]

2 years of regulated closure of small business isn't Darwinism

Like I said before - been seeing this since about 2015 with having to make changes to business agreements as new entities were purchased by the chains so nothing to do with pandemic closures (other than frustration and burnout with people screaming at them because they read science on the interwebs or don't want to wear a mask onsite).

[92redragtop]

I’m not surprised to see this in dental or optometry. Since there has been large government movement to socialize these industry’s like healthcare is. Would be windfall profits for anyone owning large groups of these.

Vets on the other hand. Is a bit of a surprise but these venture capital companies only care about making as much money as possible. So if the industry is profitable enough and they can see a large enough profit by buying up major market share then I would not put it past them.

However. What is described in this article. IS NOT CAPITALISM AND IS NOT FREE MARKET!

Claiming so is intellectually dishonest

It’s actual by definition the opposite. This is cronyism and these companies only get away with what they do from major government intervention wether it’s from lobbying, law changing or regulation.

It’s Venture capitalists (deemed “to big to fail”) working with government entities to essentials restrict free market. And make each other rich while doing it. .

PE and VC are different things.

So what is capitalism and free market then? If you have cash and want to deploy to maximize your return on investment on that cash (that you made in business) and see an opportunity to make that return due to inefficiencies in the market that could be corrected for profit (eg. fragmentation and margins depressed by ineffective operators, inefficiencies in cost or price management, arbitrage, etc) - what do you call that?

In many of these examples, it's the absence of government that opens a window for these opportunities and they do it (ie. profit maximization) until someone steps in with regulation (which is not free market at that point).

[92redragtop]

I think I’ve seen this episode on Billions

Yeah, and BNPL is the new thing to replace the high interest credit card lending model....I think they've dabbled with some of these emerging segments too.

[ChickenLips]

Like I said before - been seeing this since about 2015 with having to make changes to business agreements as new entities were purchased by the chains so nothing to do with pandemic closures (other than frustration and burnout with people screaming at them because they read science on the interwebs or don't want to wear a mask onsite).

does regulated closure of small business while exempting large business help or hurt a move towards monopolies.

[5.4MarkVIII]

PE and VC are different things.

So what is capitalism and free market then? If you have cash and want to deploy to maximize your return on investment on that cash (that you made in business) and see an opportunity to make that return due to inefficiencies in the market that could be corrected for profit (eg. fragmentation and margins depressed by ineffective operators, inefficiencies in cost or price management, arbitrage, etc) - what do you call that?

In many of these examples, it's the absence of government that opens a window for these opportunities and they do it (ie. profit maximization) until someone steps in with regulation (which is not free market at that point).

Free market capitalism is equal exchange of goods or services.

It isn’t monopoly’s, government subsidies, government investing, government restrictions, or lobbyists.

I think you know that but choose to conflate things.

I won’t get suckered into another one sided argument with a person trying to play gotcha.

The reality is until the consumer stands up and says enough. And stops voting for more government intervention and stops supporting these massive multinational government protected “corporations”

Products will get shittier wages will remain lower and people will keep getting screwed.

[92redragtop]

Free market capitalism is equal exchange of goods or services.

It isn’t monopoly’s, government subsidies, government investing, government restrictions, or lobbyists.

I think you know that but choose to conflate things.

I won’t get suckered into another one sided argument with a person trying to play gotcha.

The reality is until the consumer stands up and says enough. And stops voting for more government intervention and stops supporting these massive multinational government protected “corporations”

Products will get shittier wages will remain lower and people will keep getting screwed.

OK you define it how you "want" to but I don't think that's the established definition in any of the ones I've seen. I agree that it is up to the consumer and/or workers as other stakeholders or resource inputs to determine when they withhold their inputs.

What Does Free Market Capitalism Mean?
Any economy is capitalist as long as private individuals control the factors of production. A purely capitalist economy is also a free market economy, meaning the law of supply and demand, rather than a central government, regulates production, labor, and the marketplace. Companies sell goods and services at the highest price consumers are willing to pay while workers earn the highest wages companies are willing to pay for their services. The profit motive drives all commerce and forces businesses to operate as efficiently as possible to avoid losing market share to competitors.

[92redragtop]

does regulated closure of small business while exempting large business help or hurt a move towards monopolies.

I must have missed these "regulated closures" from pre-2015 to 2020 while this trend was really accelerating.

[ChickenLips]

PE and VC are different things.

So what is capitalism and free market then? If you have cash and want to deploy to maximize your return on investment on that cash (that you made in business) and see an opportunity to make that return due to inefficiencies in the market that could be corrected for profit (eg. fragmentation and margins depressed by ineffective operators, inefficiencies in cost or price management, arbitrage, etc) - what do you call that?

In many of these examples, it's the absence of government that opens a window for these opportunities and they do it (ie. profit maximization) until someone steps in with regulation (which is not free market at that point).

what's a better method of price reduction for the consumer, competition or monopoly.

what's a better method of maximizing profit, competition or monopoly?

[5.4MarkVIII]

OK you define it how you "want" to but I don't think that's the established definition in any of the ones I've seen. I agree that it is up to the consumer and/or workers as other stakeholders or resource inputs to determine when they withhold their inputs.

What Does Free Market Capitalism Mean?
Any economy is capitalist as long as private individuals control the factors of production. A purely capitalist economy is also a free market economy, meaning the law of supply and demand, rather than a central government, regulates production, labor, and the marketplace. Companies sell goods and services at the highest price consumers are willing to pay while workers earn the highest wages companies are willing to pay for their services. The profit motive drives all commerce and forces businesses to operate as efficiently as possible to avoid losing market share to competitors.

Where in that definition does it say lobbyists and politicians working together with multinational, multibillion dollar companies buying up all the competition, while driving up prices and driving down wages is free market capitalism.

It has nothing to do with how I “want” to define it.

It’s defined that way by many many people smarter than both you and I.

[5.4MarkVIII]

I must have missed these "regulated closures" from pre-2015 to 2020 while this trend was really accelerating.

It’s not lost on people how easily you can ignore key factors in order to make the narrative fit what you want.


“In before the Trump/racist angle”


Either way the average person is getting screwed while people like you make excuses and spread Bs

[92redragtop]

Where in that definition does it say lobbyists and politicians working together with multinational, multibillion dollar companies buying up all the competition, while driving up prices and driving down wages is free market capitalism.

It has nothing to do with how I “want” to define it.

It’s defined that way by many many people smarter than both you and I.


I don't know what your economics textbooks said but I think our learning journeys differ. No time to teach you guys economics.

[92redragtop]

It’s not lost on people how easily you can ignore key factors in order to make the narrative fit what you want.


“In before the Trump/racist angle”


Either way the average person is getting screwed while people like you make excuses and spread Bs

The dates I posted were from 2015 (actually before) to 2022, and closures were 2 of those - at least do the math before falling into conspiracy or other arguments.

[5.4MarkVIII]

I don't know what your economics textbooks said but I think our learning journeys differ. No time to teach you guys economics.

Trust me I won’t be coming to You for any lessons.

[5.4MarkVIII]

The dates I posted were from 2015 (actually before) to 2022, and closures were 2 of those - at least do the math before falling into conspiracy or other arguments.

The article YOU posted was from 2022

It’s not lost on people how everything YOU disagree with is “a conspiracy theory” and never with any proof

[92redragtop]

The article YOU posted was from 2022

It’s not lost on people how everything YOU disagree with is “a conspiracy theory” and never with any proof

Read my preamble before the article....and in posts after the article, then do the math as to chicken or egg.

[5.4MarkVIII]

Read my preamble before the article....and in posts after the article, then do the math as to chicken or egg.



Quote “Been watching this trend over the past 7 years with dental, eyecare, and vet practices”

Are you denying that other industries are effected and that covid and specifically government policy’s during that time made things worse?


The article YOU posted was from a couple days ago e. And while it mentioned a trend starting as far back as 2013 It clearly mentioned 2020 and 2021. And seemed to indicate a worsening trend

Are other people no longer even allowed to add to a conversation without you jumping right to conspiracy?

Perhaps other people have experience that differs from your own. You might learn more if you were more open minded.

[92redragtop]

LOL ok...to each their own.

[ChickenLips]

Trust me I won’t be coming to You for any lessons.

sidebar. Just last week I read Thomas Sowell's "Basic Economics" which is a great read. Available on Audible for easy consumption while driving or during other low mental commitment activities.

Could be useful in this conversation. BTW monopolies and regulations are a couple of many topics covered, in depth.

Well written, easy to consume and comprehend.

[5.4MarkVIII]

sidebar. Just last week I read Thomas Sowell's "Basic Economics" which is a great read. Available on Audible for easy consumption while driving or during other low mental commitment activities.

Could be useful in this conversation. BTW monopolies and regulations are a couple of many topics covered, in depth.

Well written, easy to consume and comprehend.

Yeah but he probably used the same make of typewriter as a guy who sat on the same bus as a racist, so disregard everything he said.

[ChickenLips]

I'm not sure what the disagreement is in this thread.

TBH I didn't read the entirety of the opening huge posts and simply commented on what appears to be creation of monopolies.

Is this a pro, anti monopoly thread?

[5.4MarkVIII]

I think the original article is interesting. Could be topic for interesting conversation. For people willing to converse.

[ChickenLips]

well since I was commenting I figured I'd better read all of the original posts.

While I don't like monopolies, from what's presented I don't see a subversion of free market capitalism here. What appears to be missing IMO is whether consolidators are benefitting from preferred taxation or regulation not offered to small business.

If there's a level playing field and consolidators are overvaluing and overspending to hoover up all the small businesses that sounds like an opportunity for a small independent to undercut the big guys.

My spidey senses are telling me the taxman and regulators are helping the big guys. Big corporations have money to lobby and grease the wheels. This doesn't feel like the whole story.



Consider Blackrock buying up massive numbers of private homes. Inflation and economic downturn is costing people their homes, Blackrock is buying them up. Who creates inflation? Only governments. Who benefits from the defaults and massive home buying sprees? It's a Scooby Doo mystery.

Bill Gates is buying up massive tracts of farmland, to what end?

I'm running low on tinfoil BTW.

[5.4MarkVIII]

well since I was commenting I figured I'd better read all of the original posts.

While I don't like monopolies, from what's presented I don't see a subversion of free market capitalism here. What appears to be missing IMO is whether consolidators are benefitting from preferred taxation or regulation not offered to small business.

If there's a level playing field and consolidators are overvaluing and overspending to hoover up all the small businesses that sounds like an opportunity for a small independent to undercut the big guys.

My spidey senses are telling me the taxman and regulators are helping the big guys. Big corporations have money to lobby and grease the wheels. This doesn't feel like the whole story.



Consider Blackrock buying up massive numbers of private homes. Inflation and economic downturn is costing people their homes, Blackrock is buying them up. Who creates inflation? Only governments. Who benefits from the defaults and massive home buying sprees? It's a Scooby Doo mystery.

Bill Gates is buying up massive tracts of farmland, to what end?

I'm running low on tinfoil BTW.

The common these in most industry’s. Big corporation comes in buys up what competition they can in a given area. Offer big payouts, perks to gain employees, and rock bottom prices. Operate that area at a loss or break even point. Forcing all the smaller businesses around them left to do the same. The crushes the smaller business and puts them out of business. As soon as there is little to no competition left in that area. Prices go up to higher than what they were before.

You are 100% correct that these larger business threw Lobbying and other means have government backing. Look even to recent subsidy programs in the name of green energy. Guidelines to revive or pass on Renaults greatly favour the large corporation.

This is not free market by definition.
Honestly consumers them selves are to blame for the monster that is.

Cheapes prices possible over decades equals inferior product, lower wages and poor customer service.

[ChickenLips]

I understand the whole process of undercutting prices, buying the competition, cornering the market. Essentially Walmart but in different sectors.

From the consumer perspective, the undercutting consolidation phase should create lower prices.

Once a monopoly is created and prices are raised there should be an opportunity for competition to undercut the monopoly, and again serve lower prices to consumers.

Free market competition should self correct via chasing lowest consumer prices.

If it's not correcting, there is intervention somewhere tipping the scales. Seems pretty obvious that is monopolies are succeeding, there's fishy business going on, what could that be?

[5.4MarkVIII]

I agree that outside forces are keeping the free market from self correcting

But I think the chase for lowest prices is also part of the problem.

Eventually you are going to reach a point where the product can’t be made cheaper. In this case the small store that has to pay a higher wage, has to out source shipping.

when the monopoly’s happens and they control their own supply chain as well as unbelievable control over what they pay the supplier. Yes in alot of cases (if we continue to use big box stores as an example) the big corp essentially tells the supplier what they are willing to pay for product. This act eliminates any smaller companies from being able to compete.

I’m making an assumption. But it reads like the same thing is happening to vet’s dentists and eye drs that has previously happened in hardware stores for example.

[5.4MarkVIII]

I should add. There seems to be the start of a self correction in some cases. In my industry for example. We are seeing more people come back and want to buy a product that’s going to last even if it costs more as well as coming back to smaller stores to gain the true customer service that is knowledge and after point of sale service.


It’s a start but at the same time we also have larger service companies cutting deals directly with the manufactures to gain all of the service contracts. These large service companies then offer the contract to a small third party for a reduced rate. Take one large corp giving preferred service to another large corp and add to that increased government policy, licensing ect

And it’s just another example of the same problem.

[ChickenLips]

The chase for the lowest price is the foundation of capitalism. Lowest price has a number of qualifiers, like value or total cost of ownership (which is value).

If a good or service is of higher quality but higher price than a competing good or service of lower quality and lower price it's up to the consumer to decide which provides the best value.

None of us pay extra for anything. We shop for the best value. Being able to shop being key when discussing monopolies. Monopolies remove the ability to shop around.

A monopoly can extract higher profits. These higher profits can then be used to pay for legislation or regulatory changes to cement the monopoly. If a monopoly is in place there is fuckery somewhere behind it. A free market will always follow lowest cost, highest value.

[5.4MarkVIII]

“If a good or service is of higher quality but higher price than a competing good or service of lower quality and lower price it's up to the consumer to decide which provides the best value“


My experience is this is rare anymore that’s why I lay blame on the consumer as well.

Every day people come in and want the absolute cheapest. You take the time and explain the value of spending more, you real down the dollar per year of service, and 9 times out of ten they still want the cheapest. Only to come screaming in a couple years when it’s broke. Lol

No system is perfect.


I think we are moving off topic slightly.

But I do see if fields like Veterinary, dental and optometry your dealing with industry’s that are Highly regulated by governing bodies.

I totally get why a private practice owner would jump at the massive payout to not have to deal with all the red tape.

Ultimately I think the consumer will pay the price.

[5.4MarkVIII]

The chase for the lowest price is the foundation of capitalism.

I just don’t agree with this sentiment.
Free trade capitalism is based on the foundation of equal trade of goods or services.

Money being a goods,

When we move to cheap product at the same price because it’s the only option we have lost sight


150 years ago the blacksmith didn’t charge a fortune for his work because he was the only black smith in town.

Maybe not the best analogy but we are greedy now. Always wanting more for less. To me it’s akin the the entitlement that is rampant in society.

[ChickenLips]

nailed it on post 42. Heavily regulated.

not agreeing or not liking the sentiment doesn't change the reality. You said it yourself, customers come in looking for the absolute cheapest. If you found some way to cut your overhead and could sell cheaper than competition, you'd do it and grab market share. Your frustration with absolute cheapest customers is their lack of appreciation of your perceived added value. BTW I'm not suggesting it isn't there, only it's not recognized.

A blacksmith, cooper, or cobbler would have to charge some amount greater than their cost of doing business. They could charge as much as the market would bear. No different today. Competition would force efficiency or business death.

Circling back to the original discussion, regulation appears to be the key factor. Maybe it's corruption, maybe bigger can more efficiently navigate legitimate regulation. I'm leaning towards some level of legitimate legislation and another layer or 10 designed to favor monopolies that can grease the wheels of regulators.

I think it's fair to make the broad statement that a decision that is bad for the rank and file, and the public while being beneficial to the decision maker will be green lit.

[5.4MarkVIII]

nailed it on post 42. Heavily regulated.

not agreeing or not liking the sentiment doesn't change the reality. You said it yourself, customers come in looking for the absolute cheapest. If you found some way to cut your overhead and could sell cheaper than competition, you'd do it and grab market share. Your frustration with absolute cheapest customers is their lack of appreciation of your perceived added value. BTW I'm not suggesting it isn't there, only it's not recognized.

A blacksmith, cooper, or cobbler would have to charge some amount greater than their cost of doing business. They could charge as much as the market would bear. No different today. Competition would force efficiency or business death.

Circling back to the original discussion, regulation appears to be the key factor. Maybe it's corruption, maybe bigger can more efficiently navigate legitimate regulation. I'm leaning towards some level of legitimate legislation and another layer or 10 designed to favor monopolies that can grease the wheels of regulators.

I think it's fair to make the broad statement that a decision that is bad for the rank and file, and the public while being beneficial to the decision maker will be green lit.

I think your missing the point I’m trying to make.
Competition is a good thing. But it’s not free market when large corp one cuts a deal with large corp two in order to line pockets and crush the competition. That’s not free market
When a large company with millions behind it moves to head hunt employees from their competing. That’s not free market.

If the only way one business can complete with another is threw shady business practices. The. That’s not free market .

For too long society has accepted. “No hard feelings it’s just business.” As just a part of free market.
And proponents of anti free market have used this as a crutch because when it comes to political/ economic ideology’s. Nothing else has done as much for the average person that tree market capitalism has. But when they don’t have an argument they point to Amazon and say look at them that’s free market.
Would Amazon had gotten as big as they did if they were not given deals on shipping form government owned postal services that were not given to anyone else? Perhaps they would have. I think there is a chance they would not have.

Free market is build on equal playing field.

I’m not saying that the blacksmith would not charge enough to make a living. I’m saying that backsmith wasn’t charging $100 when his closest completion was only charging 20. And when he couldn’t get customers. Buy out the next closest completion and then charge 100 there too.

[RedSN]

I think your missing the point I’m trying to make.

That’s not free trade.

Free trade is build on equal playing field.



None of that is "free trade". Free trade is a trade policy that does not restrict imports or exports.

[5.4MarkVIII]

None of that is "free trade". Free trade is a trade policy that does not restrict imports or exports.

Wrong words. Too much going on. Fixed it.

[92redragtop]

I'd love to see an established definition from the world of economics where free trade equals equal trade. Is this the CRT version of economics?

[5.4MarkVIII]

I'd love to see an established definition from the world of economics where free trade equals equal trade. Is this the CRT version of economics?

I’d love to see an established definition where corrupt business to business or business to government relationships equal free market.

[ChickenLips]

I think your missing the point I’m trying to make.
Competition is a good thing. But it’s not free market when large corp one cuts a deal with large corp two in order to line pockets and crush the competition. That’s not free market
When a large company with millions behind it moves to head hunt employees from their competing. That’s not free market.

If the only way one business can complete with another is threw shady business practices. The. That’s not free market .

For too long society has accepted. “No hard feelings it’s just business.” As just a part of free market.
And proponents of anti free market have used this as a crutch because when it comes to political/ economic ideology’s. Nothing else has done as much for the average person that tree market capitalism has. But when they don’t have an argument they point to Amazon and say look at them that’s free market.
Would Amazon had gotten as big as they did if they were not given deals on shipping form government owned postal services that were not given to anyone else? Perhaps they would have. I think there is a chance they would not have.

Free market is build on equal playing field.

I’m not saying that the blacksmith would not charge enough to make a living. I’m saying that backsmith wasn’t charging $100 when his closest completion was only charging 20. And when he couldn’t get customers. Buy out the next closest completion and then charge 100 there too.

I am getting the point. Buying up the competition is dirty pool as far as the consumer is concerned. it's been going on for milenia. Look at DeBeers and their strangle hold on diamonds. Surely Walmart, Amazon and all other behemoths are dirty dealing to some degree. I don't like it, you don't like it, the consumers are either ignorant or don't like it.

We're not operating in a free market, we're pretty damn close to socialism, especially when considering 50% of your earnings goes to taxation.

Bailing out GM and other large employers is socialism and vote buying. The problem being the political cycle that moves like this make is about half of the economic cycle it takes for those bad decisions to bear rotten fruit. Enter another round of vote buying and regulation.

In ideal circumstances the markets would self correct and punish monopolies. In a truly free market, monopolies would die a natural death. In a free market if the blacksmith bought the competition, another would spring up to seize market share. The monopolist could not continue to buy out competition into perpetuity unless competition was stifled (regulation). Look at taxi's versus Uber. The regulators and regulated taxi drivers both object but for different reasons. Regulators revenue is threatened (revenue gained without adding value). Taxi drivers now having to compete with a lower cost alternative, lower cost in part via no regulations or fees. In a truly free market taxi's should die and ride share prevail unless taxi cost of doing business drops to competitive rates.

Back to my point, which is that is monopolies exist its because governments allow or encourage it to meet their own ends.

So yes I completely agree this isn't free markets, we've just taken different routes to reach the same conclusion. I choose to blame regulators, not those who take advantage of crooked and malleable regulators.

[5.4MarkVIII]

I am getting the point. Buying up the competition is dirty pool as far as the consumer is concerned. it's been going on for milenia. Look at DeBeers and their strangle hold on diamonds. Surely Walmart, Amazon and all other behemoths are dirty dealing to some degree. I don't like it, you don't like it, the consumers are either ignorant or don't like it.

We're not operating in a free market, we're pretty damn close to socialism, especially when considering 50% of your earnings goes to taxation.

Bailing out GM and other large employers is socialism and vote buying. The problem being the political cycle that moves like this make is about half of the economic cycle it takes for those bad decisions to bear rotten fruit. Enter another round of vote buying and regulation.

In ideal circumstances the markets would self correct and punish monopolies. In a truly free market, monopolies would die a natural death. In a free market if the blacksmith bought the competition, another would spring up to seize market share. The monopolist could not continue to buy out competition into perpetuity unless competition was stifled (regulation). Look at taxi's versus Uber. The regulators and regulated taxi drivers both object but for different reasons. Regulators revenue is threatened (revenue gained without adding value). Taxi drivers now having to compete with a lower cost alternative, lower cost in part via no regulations or fees. In a truly free market taxi's should die and ride share prevail unless taxi cost of doing business drops to competitive rates.

Back to my point, which is that is monopolies exist its because governments allow or encourage it to meet their own ends.

So yes I completely agree this isn't free markets, we've just taken different routes to reach the same conclusion. I choose to blame regulators, not those who take advantage of crooked and malleable regulators.

I get you. We are saying the same thing just different.

Off topic but similar discussion I think. There was an article I’ll try and find discussing a pilot test on a 4 day work week. It looks as though the UK government is footing the bill for work day number 5 for the test.

[92redragtop]

I’d love to see an established definition where corrupt business to business or business to government relationships equal free market.

Maybe that can be found in an alt right econ textbook or on Tucker Carlson's show.

[ChickenLips]

Maybe that can be found in an alt right econ textbook or on Tucker Carlson's show.

what is the purpose of your post? How does alt right or Tucker Carlson enter into the discussion?

[92redragtop]

what is the purpose of your post? How does alt right or Tucker Carlson enter into the discussion?

Just considering where certain versions of economics definitions are coming from - never seen it in a micro/macro textbook so it must be located at some other angle/location (if there is no textbook).

[5.4MarkVIII]

Just considering where certain versions of economics definitions are coming from - never seen it in a micro/macro textbook so it must be located at some other angle/location (if there is no textbook).

Show me the text book that defines free market as government intervention and/or big business back room deals with other big business?

Is everything you disagree with racist or conspiracy?

Did you one time not complain about a certain former president and his iffy business practices? Are you now saying that is what free market is?
Do you think free market is bad?
What would you like to see in its place?

[ChickenLips]

Just considering where certain versions of economics definitions are coming from - never seen it in a micro/macro textbook so it must be located at some other angle/location (if there is no textbook).

how does that relate to alt right or Tucker Carlson? For that matter why are those two grouped?

[RedSN]

This thread takes the prize. Not 10 posts in and it went sideways, and you guys are arguing the SAME SIDE OF THE COIN.

[92redragtop]

But what if the coin is made up?

[92redragtop]

how does that relate to alt right or Tucker Carlson? For that matter why are those two grouped?

Both are fairy tales (ie. that version of "economics").

[92redragtop]

LOL, OK I'm out or the frequent refreshing on new posts will BF this. Prefer to leave it here as FYI for consumers in a free market environment to vote with their dollars/feet (or not) once armed with information.

[5.4MarkVIII]

This thread takes the prize. Not 10 posts in and it went sideways, and you guys are arguing the SAME SIDE OF THE COIN.

how is an active conversation sideways. sure certain parties are just playing games and looking for gotyas, but why is it anytime there is a conversation about important issues people get up tight. opinons differ talking about them usualy helps people understand things better.

[5.4MarkVIII]

LOL, OK I'm out or the frequent refreshing on new posts will BF this. Prefer to leave it here as FYI for consumers in a free market environment to vote with their dollars/feet (or not) once armed with information.

so no text book definition coming?

[ChickenLips]

troll goal accomplished

[83 5.0]

I work in the Hearing health industry, and the Hearing aid manufacturers have been buying up the small private clinics (quite a number of owners ready to retire)and converting them to their brand name store fronts. They just cut out a customer they used to have to give a discount to sell their product. They now go from manufacturing straight to retail, a huge mark up they don't have to share.
One company on the equipment side owns just about every equipment manufacturer.
Funny thing, about 15+ years ago the European competition board wouldn't let 2 companies merge as they felt they would have too much of a market share, stifling competition. Somehow the industry has found a way around this.

[ChickenLips]

I work in the Hearing health industry, and the Hearing aid manufacturers have been buying up the small private clinics (quite a number of owners ready to retire)and converting them to their brand name store fronts. They just cut out a customer they used to have to give a discount to sell their product. They now go from manufacturing straight to retail, a huge mark up they don't have to share.
One company on the equipment side owns just about every equipment manufacturer.
Funny thing, about 15+ years ago the European competition board wouldn't let 2 companies merge as they felt they would have too much of a market share, stifling competition. Somehow the industry has found a way around this.

15 years ago regulators wouldn't allow monopoly.

Currently regulators allow monopolies

Whose interests do the regulators serve?

[hammerhead]

seems to be a common trend for most business now in the past 20yrs or so —seeing it in trucking as well as insurance and most other industries —nothing new really I don't think, isn't this how Waste Management grew...? It can be a worrisome prospect tho.

Went to the doctor myself about a week ago —didn't get answers but was sent for blood work —I suspect my blood is fine and probably will not receive a call telling me my blood is fine and will probably never get answer for what I went there for unless I go back...because my blood is fine and 10-15 minutes is enough and they have no time to talk or diagnose or discuss probabilities because ten minutes is enough and too mush to trouble shoot with questions that may lead to answers...lol

[92redragtop]

New development in vet business.....




U.S. consumer protection agency intervenes in vet-chain merger, citing antitrust concerns

CHRIS HANNAY INDEPENDENT BUSINESS REPORTER
PUBLISHED 46 MINUTES AGO
FOR SUBSCRIBERS

The U.S. Federal Trade Commission has intervened in the merger of two veterinary-care chains, one of which operates in Canada, over concerns that the firms violated antitrust laws.

The consumer protection agency said this week that JAB Consumer Partners’ US$1.1-billion acquisition of rival SAGE Veterinary Partners would allow the combined entity to form local monopolies in some cities in Texas and California. Those monopolies would allow the company to have total control of pricing and availability of services in those markets.

The FTC ordered JAB to sell off clinics in three regions of Texas and California and put restrictions on the company’s ability to buy clinics in those markets for 10 years.

JAB Consumer Partners, an international private-equity firm headquartered in Luxembourg with US$55-billion in assets under management, owns the National Veterinary Associates (NVA) chain of clinics, which is one of the three main corporate players in Canada with more than 100 locations.

JAB’s latest acquisition is part of a growing wave of international concentration of medical services under corporate ownership. Private-equity-backed firms buy up independent practices and consolidate them into chains to extract profits. As in the case of NVA, most acquired offices retain their old branding so that patients may not know that ownership has changed hands.

In a statement accompanying the order, FTC chair Lina Khan said this business model was problematic because business considerations could influence medical decisions.

“A focus on short-term profits in the health care context can incentivize practices that may reduce quality of care, increase costs for patients and payors, and generate appalling patient outcomes,” Ms. Khan said in the statement also signed by two other commissioners.

An NVA Canada spokesperson referred questions to the U.S. branch, which did not respond to questions by deadline.

The FTC’s actions follow two interventions in recent months by the British competition regulator, which raised concerns about two separate mergers among veterinary chains in that jurisdiction. The British regulator said it was acting based on complaints of higher prices and declining services among the chains’ clients. The regulator also cited statistics showing that the share of corporate ownership of veterinary clinics had risen to 55 per cent in 2021, up from 11 per cent in 2013.

Canada’s Competition Bureau said that, for confidentiality reasons, it could not say whether it is conducting any investigations in Canada’s veterinary sector.


Paul Pion, a leading independent veterinarian in California and the co-founder of the Veterinary Information Network, said corporate ownership of veterinary clinics began to really take off in the low-interest-rate environment that followed the 2008 recession.

The appetite among consolidators to buy clinics grew even stronger during the pandemic, as demand for pet services grew and private-equity investors looked for fragmented industries generating steady revenue. As well, rock-bottom interest rates made it easier for consolidators to take on large debts to fuel their acquisitions.

The competition among corporations also led to bidding wars for clinics, so that their valuations grew from a few times annual earnings to much more than that, pricing independent practitioners out of ownership.

The same trends have played out in Canada, where industry figures have told The Globe that some practices have been sold for more than 20 times earnings this year.

Dr. Pion said froth may begin to come out of the markets as interest rates go up. He pointed to recent comments from the executives of two Australia veterinary chains, who said they were slowing acquisitions because the costs had become too high.

“It’s all happened through boom years,” Dr. Pion said. “It’ll be interesting to see if the high demand for veterinary medicine, if we get into a recession, goes down. What’s the reaction of the corporates? Will they start trying to sell, close, cut corners?”

[5.4MarkVIII]

one scary prospect would be that cooperate ownership is usualy more inclined to cut and run.when the are at or on the verge of a monopoly and things get rough, be it economy related or what ever. look for the doors to just be locked one day. sorry no health care for your pet.

[92redragtop]

They are PE (vs VC) so they typically take cost out to improve margin then flip once they get their ROC and ready to move on or need to unload assets....sort of like BRRR in real estate. The areas of healthcare they are chain-building in typically have price-inelastic demand models.

[ChickenLips]

monopolies have no incentive for improvements in service, pricing or any other metric consumers desire.

They do generate surplus profits which can be used to buy influence.

[92redragtop]

The PE funds typically look for spaces where regulators are not focused on so you don't want government or politics involved. Idea is to extract as much ROC as possible while no one is looking....basic arb strategy.