OPPOSITION calls to reject the proposed merger of Chemist Warehouse and Sigma Healthcare are growing louder, with the Pharmacy Guild of Australia further expressing its disapproval.
In a submission to the ACCC's competition review and reported by the Australian Financial Review, The Pharmacy Guild has labelled efforts by Chemist Warehouse to lessen the impact as "tokenistic".
Arguments put forward by the Guild say that the deal should not proceed as the combined group would control more than half of revenue in the pharmacy sector.
Other issues raised by the Guild include a pledge by Sigma to continue as a wholesaler and offer the full range of PBS medicines to the sector, including competitors.
"It is not a change but a continuation of the status quo which is in Sigma's interest," the Guild's ACCC submission reads.
The Guild's concerns follow similar criticisms levelled last week by John Cullity, the CEO of TerryWhite Chemmart's parent company, EBOS Group (PD 17 Oct), who said the deal may negatively impact smaller businesses and would reduce choice in the market for consumers.
Earlier this year, the ACCC flagged competition concerns surrounding the deal, citing a reduction in pharmacy choice for customers that "may lead to increased prices for the goods and services provided in pharmacies".
Sigma Healthcare reacted by sweetening the deal, offering members of its Amcal, Discount Drug Store and Guardian brands the option of easily withdrawing from the group if the Chemist Warehouse merger is approved.
Sigma has also said it would keep separate customer records, which would not be shared with the Chemist Warehouse brand.
According to the AFR, Sigma's offer to allow pharmacies to leave the group signalled internal ructions within the membership.
Citing "inherent conflict of interest", the Guild believes the merger company would be incentivised to provide "preferential treatment to Chemist Warehouse pharmacies".
"The proposal does not address whether the two alternative major full-line wholesalers, or the smaller wholesalers, have the ability or capacity to service Sigma's current franchisees and wholesaling customers," the submission stated.
After being delayed twice, a final decision by the ACCC is expected by next month. ML
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