Price disclosure to hit rents
August 28, 2013
The government’s new price
disclosure regime for pharmacies
will have a direct impact on the
Landlord-Lessee relationship and
will need to be met with “major
rental reductions,” according to
Australia’s leading Retail Shop
Lease specialist Lease1.
Lease1 md Phillip Chapman
said the streamlined PBS price
disclosure changes, announced
without consultation in early
August, will hurt community
pharmacies through lost mark-ups
and trading terms, resulting in
reduced revenue and profits.
“Currently, the existing price
disclosure regime impacts the
average pharmacy by reduced net
profits of $56,000 on 2014/2015,”
Mr Chapman said.
“These newly announced price
disclosure requirements will equate
to additional profit losses for an
average of $32,000 per pharmacy.
“Pharmacy rentals would need to
be reduced on average by 12.31%
in 2014/2015 if the gross rent to
gross margin ratio was to remain
the same,” Chapman added.
“This obviously has major
implications for the Landlord-
Lessee leasing relationship in the
Pharmacy sector...if ever there
was a time for landlords and their
pharmacist lessees to align their
views and lobby government – now
is that time,” he said,
“We urge pharmacies and
landlords to unite calling on
government to consult and
recompense as required by 5CPA
to protect the business future of
all stakeholders in the Pharmacy
sector,” Chapman concluded.
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