Warren, Blumenthal Take on Private Equity and Corporate Consolidation in Pet Care, Open Investigation into Mars’ Impact on Pet Owners, Veterinary Workers

Warren, Blumenthal Take on Private Equity and Corporate Consolidation in Pet Care, Open Investigation into Mars' Impact on Pet Owners, Veterinary Workers

Senators follow-up with private equity firm JAB for failing to provide detailed information and open new investigation into Mars' involvement in pet care

"Consolidation in the pet care industry appears to be allowing the largest companies, including those owned by private equity, to 'take advantage of their market power' to raise prices and undermine workers."

"We are concerned that amid Mars Petcare's consolidation in the veterinary diagnostic laboratory space, independent veterinary clinics and pet owners will be forced to pay higher prices."

JAB Response to Lawmakers from August 2024 (PDF) | Text of Follow-Up Letter to JAB (PDF) | Letter to Mars (PDF)

Washington, D.C. - U.S. Senators Elizabeth Warren (D-Mass.) and Richard Blumenthal (D-Conn.) sent two letters regarding the impact of private equity and large corporations in veterinary care, to JAB Holding Company (JAB) and to Mars Petcare (Mars), a subsidiary of Mars, Inc., respectively.

The senators' first letter addresses the private equity firm JAB's response to the senators' initial outreach in August 2024. The senators emphasized the need for JAB to provide transparent and clear information about shareholder dividends related to pet care, key financial information on the veterinary practices and pet insurance businesses it owns, executive compensation, rates charged for medications and its dispensing fees, and real-estate sales for veterinary practices the firm has acquired.

The senators' second letter addresses how candy and food conglomerate Mars' acquisitions of pet care business have impacted the cost of pet care and working conditions for veterinarians. As of 2023, Mars owned nearly half of all corporate-owned veterinary clinics. Mars is also the largest pet food company in the United States. In total, Mars owns at least a dozen pet care veterinary businesses, including veterinary diagnostics businesses, pet food, and pet technology businesses, and operates about 3,000 individual veterinary clinics around the world.

Mars' vertical integration in the pet care industry may enable the company to charge higher prices for essential veterinary care. For example, Mars' significant market power in veterinary diagnostics may allow the company to give preference to its own diagnostics laboratories at its clinics. In addition to veterinary clinics and veterinary diagnostics labs, Mars has consolidated pet food companies, leaving customers vulnerable to predatory pet food pricing. Mars owns about 50 popular pet food brands. During the COVID-19 pandemic, grocery giants abused their market power to raise prices at rates well above the rate of inflation. "We are concerned that the lack of competition in the pet food market gives Mars the ability to engage in a similar practice," wrote the senators.

The senators also requested information on how Mars' corporate ownership of veterinary clinics may create unfavorable working conditions for veterinarians. Mars' veterinary workers have reported feeling mistreated by their facilities' corporate ownership, and have "said that feelings of disposability, neglect, and exploitation were common features at Mars's facilities."

In September 2024, Senator Warren led a roundtable discussion in Watertown, Massachusetts with veterinary experts and stakeholders to discuss private equity's adverse impact on veterinary care. During and following this event, pet owners and veterinarians voiced additional concerns about how concentration and vertical integration among laboratories and other services used by veterinarians are hurting small and independent vet practices and, in turn, pet owners; and how corporate-owned veterinary practices are using noncompete agreements or non-solicitation agreements to prohibit veterinarians from choosing to start their own independent facility, thereby worsening the veterinary care shortage and stifling veterinarians' economic freedom.

The senators requested that JAB provide further information about the value of its veterinary care companies, shareholder dividends related to pet care, whether JAB-owned diagnostic labs charge different prices to JAB-owned clinics, and their use of noncompete agreements by December 2, 2024. The senators are requesting that Mars provide information about its pet care acquisitions, the revenue from acquired clinics, whether it has pushed pet owners to purchase Mars pet food, and its possible use of noncompete agreements by December 2, 2024.

Senator Warren has long fought to crack down on corporate consolidation that threatens consumers and raises prices:

• In October 2024, Senator Elizabeth Warren led the reintroduction of the Stop Wall Street Looting Act, comprehensive legislation to fundamentally reform the private equity industry and level the playing field by forcing private investment firms to take responsibility for the outcomes of companies they take over, empowering workers and protecting investors.
• In July 2024, Senators Warren, Klobuchar, Murphy, Sanders, Booker, and Blumenthal wrote a letter to the Department of Justice and Federal Communications Commission, urging them to scrutinize T-Mobile's proposed acquisition of UScellular.
• In July 2024, Senator Warren and Representatives Mark Pocan (D-Wis.) and John Garamendi (D-Calif.) urged the Department of Defense (DoD), FTC, and DOJ to review TransDigm Group Inc.'s acquisitions of two specialized aerospace contractors to prevent price gouging.
• In June 2024, Senator Warren wrote to DOJ, FTC, and the Department of Health and Human Services (HHS), calling out high health care costs due to vertically-integrated insurers, private equity companies, and pharmaceutical companies that are driving health care consolidation.
• In June 2024, Senators Warren and Markey (D-Mass.) introduced the Corporate Crimes Against Health Care Act of 2024 to root out corporate greed and private equity abuse in the health care system.
• In May 2024, chairing a hearing of the Senate Banking, Housing, and Urban Affairs Committee Subcommittee on Economic Policy, Senator Warren highlighted the impact of concentration in the food industry and its impact on prices, product, and consumer choice.
• In May 2024, Senator Warren and Senator Josh Hawley (R-Mo.) introduced the bipartisan Airport Gate Competition Act, which would increase competition in the airline industry and lower prices for consumers by increasing the number of common use gates in airports.
• In March 2024, Senator Warren and Representative Mary Gay Scanlon (D-Penn.) led a group of 14 lawmakers in urging the FTC to revive enforcement of the Robinson Patman Act, a critical tool to promote fair competition in the food industry.
• In March 2024, Senators Warren and Klobuchar led 26 lawmakers in urging the leadership of the House and Senate Appropriations Committees urging them to strike parts of the Commerce, Science, and Justice (CJS) appropriations bill that undercut DOJ's ability to block anticompetitive mergers.
• In February 2024, Senator Warren urged FTC to closely scrutinize Choice Hotels' attempted hostile takeover of Wyndham Hotels & Resorts, which would further consolidate the hotel market and create the largest branded hotel chain in the United States.
• In February 2024, Senator Warren delivered the keynote address at RemedyFest, where she called out Big Tech for their anti-competitive tactics that have led to market consolidation and record profits.
• In February 2024, Senator Warren and 12 other lawmakers called on regulators to block the Capital One-Discover Merger.
• In December 2023, Senator Warren led 6 senators in a letter to Acting Comptroller of the Currency Michael Hsu, calling on OCC to allow states to move forward with their efforts to protect consumers from harmful bank practices. The senators criticized the OCC for overstepping its preemption authority under the Dodd-Frank Wall Street Reform and Consumer Protection Act, which the agency is abusing to block tough, state-level consumer protections.
• In November 2023, Senators Warren and Blumenthal called out U.S. Anesthesia Partners' (USAP) monopolistic business model and use of restrictive non-compete agreements that have reduced patients' quality of care, increased prices, and suppressed workers' wages.
• In October 2023, Senator Warren and Representative Pramila Jayapal (D-Wash.) urged DOJ and FTC to carefully scrutinize UnitedHealth Group's pending acquisition of Amedisys; and urged the agencies to scrutinize similar deals, reject behavioral or structural remedies, and oppose any health care acquisition that would threaten competition, increase prices, and reduce quality of care.
• In September 2023, Senator Warren and Representative Becca Balint (D-Vt.), along with a bicameral group of lawmakers, submitted a public comment to the FTC and DOJ in support of the agencies' proposed merger guidelines, endorsing the agencies' reading of antitrust law, praising the guidelines as necessary to prevent harm to workers, consumers, and small businesses.
• In August 2023, chairing a hearing of the Senate Banking, Housing, and Urban Affairs Committee Subcommittee on Economic Policy, Senator Warren highlighted the need for regulators to implement the strongest version of bank merger review guidelines in order to ensure stability in the financial system.
• In June 2023, Senator Warren sent a letter to Assistant Attorney General Jonathan Kanter, Federal Deposit Investment Corporation (FDIC) Chairman Gruenberg, Acting Comptroller of the Currency Hsu, Federal Reserve Vice Chair for Supervision Michael Barr, and Treasury Secretary Janet Yellen, urging regulators to promote greater competition in the banking sector by toughening their stances on bank mergers and strengthening bank merger review guidelines.
• In May 2023, at a hearing of the Senate Banking, Housing, and Urban Affairs Committee, Senator Warren questioned Acting Comptroller Hsu on his decision to approve JPMorgan Chase's purchase of First Republic Bank after its collapse. This merger allowed a large, poorly supervised bank to be swallowed by America's largest bank, making it $200 billion larger than it was before.

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