Publication Date 01/07/2014         Volume. 6 No. 6   
Information to Pharmacists

Editorial

From the desk of the editor

Welcome to the July 2014 homepage edition of i2P (Information to Pharmacists) E-Magazine.
At the commencement of 2014 i2P focused on the need for the entire profession of pharmacy and its associated industry supports to undergo a renewal and regeneration.
We are now half-way through this year and it is quite apparent that pharmacy leaders do not yet have a cohesive and clear sense of direction.
Maybe the new initiative by Woolworths to deliver clinical service through young pharmacists and nurses may sharpen their focus.
If not, community pharmacy can look forward to losing a substantial and profitable market share of the clinical services market.
Who would you blame when that happens?
But I have to admit there is some effort, even though the results are but meagre.
In this edition of i2P we focus on the need for research about community pharmacy, the lack of activity from practicing pharmacists and when some research is delivered, a disconnect appears in its interpretation and implementation.

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Lessons for pharmacy in the wines of France

Neil Retallick

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Neil Retallick is a former General Manager, Merchandising, for National Pharmacies, the successful community pharmacy model owned by the Friendly Societies. Neil holds a Graduate Diploma of Marketing from Monash University, is a CPM and a graduate of the AICD.He began his career with Myer Stores Ltd and worked for FMCG companies including TIA (Sheridan) and Pacific Dunlop. Prior to these roles Neil worked for Cadbury Schweppes Drinks Division - Grocery, and Trimex Pty Ltd in Victoria in State management roles.
He is currently Chief Executive Officer at the  Combined Dispensaries in Sydney and is a Member of the Advisory Board at Ehrenberg-Bass Institute for Marketing Science

Many of us enjoy a glass of wine and few would say no to a glass of French red, white or champagne. The French wine industry has a proud history, but one that ought to provide salutary lessons for the community pharmacy industry in Australia. Notwithstanding a tradition of constant innovation upon which a huge industry was built, when the French winemakers tried to protect their turf from external forces they consigned themselves to stagnation. The threats they were trying to overcome have now defeated them.

In the early years of the last century, the wine industry in France was booming. French burgundies, chablis, champagnes and myriad other wines were considered by many to be the gold standard – the best the industry could produce anywhere. Notwithstanding their size and their reputation, the French winemakers saw the level of competition increasing. Their markets were being challenged by lower-priced wines that were creeping into their markets. Sacre Bleu!

The solution initiated by the established winemakers was a regulatory one. The winemakers sought to enshrine their existing production methodologies – their specific hectares, their specific grapes, the way these were blended, the way they were made, maximum yields (presumably what was being achieved by the existing viticulture practices) and the use (not) of irrigation amongst other limitations. By establishing their AOC (Appellation d’Origine Controlee) designations, the existing winemakers ensured that the new competitors could not offer a comparable product into their markets. If a consumer wanted a Bordeaux red, then he or she was limited to purchasing from one of the wineries that held that specific designation.

It does need to be acknowledged that, at the time these controls were introduced, the French wines produced in these regions were arguably amongst the best quality wines being made anywhere. However, the passage of time operating behind the impenetrable wall created to protect the industry as it was has taken its toll, with the emergence over time of unforeseen consequences.

It has been reported that up to 20% of wines produced by AOC-designated winemakers in France is rejected by their supermarket customers because the quality is poor. The French Government subsidises the AOC winemakers and many are now able to survive only because of the government’s funding – not because they are meeting the needs of their customers and consumers.

The second consequence is that, in creating a wall to keep the competition out, the French actually found themselves locked in. Today we have the wines of the “new world’. These wines are made using grape blends and production methodologies in places that the AOC winemakers can only dream about. These ‘new world’ wines are designed to be attractive to today’s consumers and their modern day drinking habits. They have become very popular and, in many countries, have relegated the French appellation wines to the bottom shelf or worse.

What is the future for the French appellation wine houses? Well, I think that the Australian community pharmacy industry should ponder this question and contemplate its own future.

Is the ‘new world’ of community pharmacy going to be in supermarkets? Is the regulatory wall built to protect the industry in the 1930s and since going to be its limiting factor and the cause of its ultimate demise? Rather than protect the status quo, why doesn’t community pharmacy challenge existing paradigms and create a better future – one focussed on meeting the future needs of the community it serves rather than stay focussed on the current practices and outcomes?

The ‘supermarket’ threat has already emerged in the media. Some observers seem to think that opening community pharmacy up to supermarkets is the panacea to what ailments they perceive in the current system. However, doesn’t the best path for community pharmacy lie in creating its own destiny by accepting a changing reality and working to meet the new challenges being thrown up?

Corporatisation. There, I’ve said it. Isn’t the next step in the evolution of community pharmacy allowing the current owners and operators of pharmacy the ability to create modern business and financial structures that will better allow them to meet the challenges of the future? Community pharmacy today is a cottage industry. The 5.000 pharmacies are owned by more than 5,000 pharmacists. If the desire of the Pharmacy Guild is to ensure the provision of quality, professional healthcare services to the community – provided by qualified pharmacists – then it must be time to embrace a new world model.

Some writers have made reference to the success of pharmacies such as Tesco in the UK. Should they not also reference the success that is Boots? This is not supermarket but it has proven to be a very successful business model that most likely allows better healthcare. If consumers vote with their money, this is a very successful model.

In the 6CPA negotiations, we need to embrace the next step in the evolution of our proud community pharmacy history. Rather than circle the wagons as the French winemakers did (a multi-cultural metaphor), we need to push on to the ‘new world’ of community pharmacy. The Government ought to allow the development of corporate models of pharmacy ownership over the next decade without the distraction of supermarket intervention. New models need to be nurtured, so the opportunity to evolve the existing structures will need some ongoing protection. In the longer term, we might well end up with a continuing high level of professionalism and many of the initiatives seen elsewhere that are beyond our reach in the current landscape.

 

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