Sigma Healthcare and Chemist Warehouse secured clearance from the Australian Competition and Consumer Commission (ACCC) to proceed with their proposed merger after accepting an undertaking.
“The ACCC’s analysis found that the proposed merger is unlikely to substantially lessen competition nationally or locally because other pharmacies and non-pharmacy retailers will continue to compete to the same extent they compete now,” said Gina Cass-Gottlieb, ACCC chair.
“Critical to our conclusion that a substantial lessening of competition is unlikely is the competitive constraint provided by competing wholesalers including API, EBOS, and CH2.”
Cass-Gottlieb noted that consumers value the offerings of the two pharmacies differently. Moreover, the Australian government’s Pharmaceutical Benefits Scheme will continue to regulate prescription medicine pricing.
“To help ensure those pharmacies in longer term contracts are able to switch easily to a new wholesaler or banner group, we accepted an undertaking that requires Sigma not to enforce contractual restrictions on exit and ensures payments under contracts do not make it costly for a pharmacy to switch,” said Cass-Gottlieb.
Sigma will also be required to delete the safeguard and delete the data of those pharmacies that choose to switch.
In addition, the merged Sigma Chemist Warehouse must continue as a pharmaceutical wholesaler under the Commonwealth Government’s Community Service Obligation (CSO) arrangements for five years.
Sigma is a pharmacy wholesaler of prescription medicines, over-the-counter and front-of-store products, and a franchisor of pharmacies under banners including ‘Amcal+’ and ‘Discount Drug Store’.
Chemist Warehouse is a pharmacy franchisor and distributor to its own pharmacies and retail stores under the brands ‘Chemist Warehouse’, ‘MyChemist’, ‘Ultra Beauty’, ‘My Beauty Spot’ and ‘Optometrist Warehouse’.
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