Merger of Covetrus and MWI Will Likely Lead to Higher Prices for Veterinary Care Across the Country
AG James Joins FTC and 12 Other States in Suing to Block Merger
NEW YORK – New York Attorney General Letitia James today joined a bipartisan coalition of 12 other states and the Federal Trade Commission (FTC) in suing to stop one of the nation’s largest distributors of medications and supplies for veterinary clinics, Covetrus, Inc. (Covetrus) and its affiliates, from acquiring their competitor, MWI Veterinary Supply, Inc. (MWI). The two companies compete intensely for market share, offering competitive prices, discounts, and incentives to both independent and corporate-owned veterinary clinics throughout the country. Attorney General James and the coalition argue that Covetrus’ acquisition of MWI will give Covetrus the power to set higher prices, provide lower-quality services, and control more than half of the veterinary clinic distribution market nationwide. As a result, pet owners throughout New York and the nation are likely to pay higher prices for care. Attorney General James and the coalition are seeking a court order ruling the merger illegal and preventing it from being carried out.
“A trip to the vet should never break the bank,” said Attorney General James. “Pet owners are already paying enormous prices for care, and this merger would threaten to drive costs even higher. I won’t allow big corporations to buy out their rivals and make veterinary care even harder to afford. We’re taking action to enforce the law and block this merger.”
Covetrus and MWI are two of the three largest veterinary clinic distributors in the country. The companies advertise themselves as one-stop shops for veterinary clinics that can provide practices with all the equipment, supplies, and medications they need. Covetrus and MWI compete fiercely for customers, targeting both independent clinics and large corporate practice groups that can sometimes comprise hundreds of practices across multiple states. The two companies offer lower prices, rebates, and incentive packages for clinics to use their services, and corporate groups will often play the two companies against each other to negotiate lower prices. These lower prices are often passed on to consumers in the form of more affordable care.
Attorney General James and the coalition allege that Covetrus’ acquisition of MWI will substantially reduce competition among distributors to all veterinary clinics and specifically among distributors to large corporate practice groups. Covetrus and MWI are among the few nationwide distributors with the scale necessary to serve corporate veterinary practice groups that have large numbers of clinics. These corporate practice groups prefer to contract with one distributor that can serve all their locations and can typically purchase 65 to 90 percent of their supplies from just one company. The large volume that these contracts entail allows corporate practice groups to negotiate significant discounts from distributors, which can be passed on to pet owners. However, if Covetrus is allowed to purchase MWI, it will have unmatched market power to demand higher prices from these corporate practice groups.
Covetrus and MWI also compete by investing in customer service for the clinics they contract with. The two companies provide in-clinic support from experienced sales representatives and invest heavily in their sales and customer support services to assist clinics in caring for their patients. Purchasing MWI will all but eliminate any incentive for Covetrus to continue to invest in customer service, which could lead to lower quality services for pets and their owners.
Attorney General James and the coalition allege that the merger would allow Covetrus to control more than 50 percent of the relevant markets for veterinary clinic distributors, in violation of both the FTC Act and the Clayton Act. The two companies have already agreed to a temporary restraining order that prevents them from completing the merger before December 4, 2026. Attorney General James and the coalition are seeking a preliminary injunction from the court to further halt the merger, and ultimately a ruling declaring the merger illegal and preventing it from being carried out.
Joining Attorney General James in filing this lawsuit are FTC and the attorneys general of Arizona, Arkansas, California, Colorado, Maine, Michigan, Minnesota, Nebraska, North Carolina, Ohio, Oregon, and Texas.
For New York, this matter is being handled by Assistant Attorneys General Juliana Karp and Luisa di Lauro, under the supervision of Deputy Bureau Chief Amy McFarlane and Bureau Chief Elinor Hoffmann, all of the Antitrust Bureau. The Antitrust Bureau is a part of the Division of Economic Justice, which is led by Chief Deputy Attorney General Chris D’Angelo and overseen by First Deputy Attorney General Meghan Faux.
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