THE Australian Competition and Consumer Commission (ACCC) has pushed back the date it will reveal its findings on the proposed merger between Sigma Healthcare and Chemist Warehouse to 24 Oct (PD 11 Dec 2023).
The competition watchdog has expressed strong concerns that the merger could reduce competition in pharmacy retailing.
"This is a significant structural change for the pharmacy sector, with the largest pharmacy chain by revenue merging with a key wholesaler to thousands of independent pharmacies that compete against Chemist Warehouse (CW)," said ACCC Commissioner Stephen Ridgeway last month.
In its Statement of Issues (PD 13 Jun), the ACCC noted that, upon completion of the proposed acquisition, Chemist Warehouse shareholders would hold 85.75% of the ASX-listed merged entity, while Sigma shareholders would hold 14.25%.
Australia has over 6,000 pharmacies, with the ACCC estimating that the five largest banner groups account for about 40-45% of stores.
Small-to-medium pharmacies, including Chempro Chemist, Blooms The Chemist, Direct Chemist Outlet, Pharmacy 777, and Ramsay Pharmacy, represent around 15-20% of stores, with the remaining 40% being independents.
Chemist Warehouse, with approximately 550 pharmacies, accounts for 9% of retail pharmacy stores and has the second-largest number of bannered pharmacies in Australia, behind only EBOS.
The ACCC suggests that assessing market share by revenue, rather than store count, may provide a more accurate picture, particularly when including online sales. JG
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