10/10/2025
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REVENUE GENERATING UNITS
From my book Feeding Dogs (and bearing in mind most of these figures are now a decade old...):
"Over the last two decades, Mars has focused their enormous cash reserves on buying up independent veterinary practices, now at a staggering rate. Among their bigger purchases was the US veterinary giant Banfield. With more than 800 hospitals in 43 US states, and over 13,000 associates, including 2,600 licensed veterinarians, Banfield has over two million dogs and half a million cats on the books. In 2015, Mars bought Blue Pearl, adding another 53 speciality veterinary hospitals in the United States to their portfolio. In 2016, they bought Pet Partners and just a year later they made their biggest buy yet, VCA, for a staggering $7.7 billion (750 animal hospitals, 4,700 vets). In June 2018, Mars acquired the European group AniCura (200 hospitals, 4,000 vets) and Linnaeus Group Ltd. in the United Kingdom (82 clinics and five specialist referral centres). The latest investment was into the new and fast-growing Chinese market where Mars is now a partner in the RingPai Pet Hospital group who have 4,000 employees.
The net result is that by mid-2018, including all the buyouts of single veterinary hospital which receive zero column inches, Mars Inc. had more than 50,000 veterinary professionals in their pocket (REF BELOW).
And it's not just Mars Inc. In 2014 a chain of 250 hospitals called National Veterinary Associates was purchased by Ares Management for $920 million. In 2015 the ontario Teachers’ Pension Plan spent $440 million to buy a pet hospital group. last May, VCA spent $344 million for a group of 56 hospitals pooled together by a smaller consolidator for the express purpose of flipping them.
While most of us would find it hard to swallow the notion of a global, multi- billion candy company gaining control of our hospitals, we are not suggesting there is anything inherently wrong with corporate-owned vet hospitals. We need only look at our own privately run human hospitals to see the difference in care these groups can put out (at least in terms of waiting times, possibly more modern equipment and certainly fancier surroundings with better food).
However, there are many reasons why the analogy here to pet sector is a poor one:
First, in human medicine, independent doctors must refer us to private hospitals, though they too suffer industry rep influence. In the pet world, no such filter now exists. By cash-sponsoring universities and governing bodies, sitting on boards where it counts, as well as acquiring our veterinary hospitals and practices, corporations are eroding our one and only line of defence. We have only their employees for advice.
Second, all our private hospitals must deal directly with the insurance companies. Insurance companies excel at controlling medical costs by continually reviewing bills and procedures, as well as thoroughly investigating many of the claims that come to them. In the pet world, bills are smaller and pet owners largely pay cash. Moreover, should insurance be needed, usually the client pays first and negotiates with the insurer themselves for reimbursement, which reduces scrutiny on the hospital setting the bill.
Finally, keeping everyone on their toes, when human doctors make a mistake, the financial implications for the hospital can be dire. With pets, there are no real financial consequences for vets who do wrong. Pets are still treated as property and pay-outs are thus very low, topping out at approximately $1,500 for the death of a pet. This means few, if any, court cases, compounded by the fact, certainly in the UK, that the body consumers much report their issues to, the Royal College of Veterinary Surgeons, not only represents the very vets you are seeking to hold to account, but guess which multinationals cash-fund them?! And if you do want your paltry payout, it invariably requires you to sign an NDA.
Without the sword of Damocles hanging over them, it is perceivable that the C-suite of such groups will take greater risks, push more treatments, maximising profits at any and all opportunity. They are, in fact, legally obliged to their shareholders to do so.
To quote Tom Fuller (REF BELOW), a chief financial officer for Mars, the company’s business strategy is to:
..leverage our existing customer base by increasing the number and intensity of the services... received during each visit...
To facilitate this process, Mars buys up and keeps in-house all diagnostics and laboratory services. The 2017 purchase of VCA (Veterinary Centres of America) gave Mars ownership of ANTECH, the biggest diagnostics laboratory in the uS if not the world. ANTECH’s website informs us that they service more than 19,000 animal hospitals throughout North America, operating more than 50 reference laboratories in the united States and Canada. Diagnostics actually make up 41% of VCA’s operating profit.
Mars Inc.'s "Petware" manual makes for interesting reading. To quote the Bloomberg piece below:
In one example, explaining how the software is used to prescribe treatment, the book shows a checklist of therapies for a dog with atopic dermatitis or itchy skin. Doctors are encouraged to recommend a biopsy, analgesics, topical medications, antibiotics, a therapeutic dietary supplement, an allergy diet, and a flea control package. They’re REQUIRED to recommend antihistamines, shampoos, serum allergy testing, lab work, a skin diagnostic package, and anti-inflammatories. It’s a treatment course that might run $900 for symptoms that, in a best-case scenario, indicate something as prosaic as fleas. In bold print, the manual reminds doctors: “you cannot change items that were initially marked Required. They must remain REQUIRED”.
And to help their vets hit their sales targets, Mars Inc gives them ACTUAL SALES TARGETS to hit in clinic.
Clenfield (2017)6 cites Leticia German, DVM, chief of staff at a Banfield hospital in Colorado from 2010 to 2013, who states those who didn’t meet their "targets" were made to attend "workshops" in order to ‘school them into how to better meet their numbers... it was definitely intimidating.'
So, how have things been going for pet owners over the last ten years of this corporate takeover of our veterinary sector?
Here are some figures to help guide your answer:
In 2005, the US pet drug market in the US was worth an estimated $4.5 billion.
By 2015 it had jumped to $7.0 billion.
And by 2025, just a decade later, Multiple Packaged Facts estimated it had DOUBLED to nearly $15 billion USD.
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Caveat: Not all corporate-owned clinics are bad. I know some good ones. Yes they buy out the clinic but many want / need the old manager in place, they being the person that made the practice profitable in the first place. As long as they stay in place, hopefully little will change.
REF Clenfield, 2017
www. bloomberg. com/news/features/2017-01-05/when-big-business-happens-to-your-pet