Hungry and rich woolworths increases pressure on pharmacies

This report in today’s Sydney Morning Herald newspaper reports on a fresh assault by the giant Woolworths group to get government approval for pharmacies in supermarkets.

Woolworths chief Roger Corbett says pharmacies are the most protected market in Australia.

He has released a report from ACIL Tasman, an economics modelling consultancy, outlining potential savings that could be made if supermarkets operated in-store pharmacies.

Current laws restrict the number of pharmacy licences in the country to about 5,000.

“It’s almost a no-brainer, it’s so obvious and it’s just because of this enormous political pressure that has been established over the years, that this situation has been allowed to continue for so long,” Mr Corbett said.

The SMH report is well balanced but could use some more depth to explore the value for the community of independently owned and operated pharmacies.

Woolworths says it wants pharmacies in its supermarkets to help Australian consumers save money. That’s nonsense. They want it because of the profit it will generate. Anyone who believes otherwise is seriously gullible. This is a hungry and rich giant out to harm a struggling small business channel. Once they get pharmacy customers in their stores how do they treat them? While opportunistic promotion and pricing policies – they prey on gullible consumers. This is the strategy of big stores. Small business may look more expensive but you’re looking at a smaller (niche) range and so you don’t get lured into the price game of places like Woolworths.

This report Woolworths has produced should be ignored by the government and Woolworths should be told to leave the small business sector alone.

If the government does consider this latest push it also has to look at employment in the pharmacy channel, the employee:turnover ratio in small business compared to giants like Woolworths, the risk to high street tenancies, the damage to family businesses and the social cost of losing more small businesses from our retail landscape.

Big is not better. Roger Corbett’s arguments are driven by his desire to push the share price up and make his options more valuable.

Independent retailers in Australia need to fight this push we need to band together and educate consumers, fight the push from companies like Woolworths and support each other more.

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