Editorial

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Welcome to the first homepage edition of i2P for 2012.
In many ways it has been a slow start to the New Year because of having to deal with the “leftovers” from 2011.
One of those items for i2P was that a third-party provider to the site did not advise of a code change to the security section in our subscribe panel, creating a range of frustrated subscribers not able to get on board.
We apologise to all those potential subscribers who were unable to register with us in the second half of 2011, but if you try once more you should have no problem.

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Volume 2012 Number 1

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Private Labels Finding Favour

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	Peter Sayers articles by this author...
Peter Sayers is vitally concerned about pharmacy professional practice - its innovation, its research and development, and its delivery to create an ongoing revenue stream. Delivery of healthcare is increasingly involved with Information Technology systems. All perspectives in IT must be considered for the impact on pharmacy practice and its viability.

Since the global financial crisis began to bite, Australians have shifted more of their weekly purchases into private label.
In respect of the $70 billion pa food market, private label currently accounts for 23%, with the prospect of moving to 30% within five years.

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The growth in private label has been outperforming traditional branded grocery items for quite some time with performance in growth falling unevenly across the sector. Milk, for example, is now represented as 52% in private label.

Woolworths and Coles are now moving into private label for beer and wines after controlling a substantial market share of the liquor industry through their various bottle shops.

And in supermarket terms, the pharmacy department/shop is always located next to liquor.

It must be very galling for supermarkets not to have cracked pharmacy ownership here in Australia.

Recently, Coles was seen to send a message to pharmacists by the deep discounting of Zantac, a product that originated in pharmacy as a restricted Schedule Four product, gradually sliding down the poison schedules to the extent that it can now be commoditised through discounting and limiting sales to four packets per purchase.

Now this is below Chemist Warehouse price!

Is Coles starting a campaign to pick them off product by product?

It is also known that the PGA has asked both political party leaders to sign a letter prior to the election confirming their commitment to a supermarket-free pharmacy environment.

The ask must be getting extremely hard these days given the supermarket-type pharmacies that seem to spring up daily, giving excellent modeling ideas for the Colesworths.
While Woolworths have cancelled some of their trademarks that included the words “pharmacist” or “pharmacy” and the PGA has seen this as supermarket capitulation, most commentators do not see the Colesworth push to own pharmacies as diminishing.

So in the mix of private labels, supermarkets and pharmacy warehouses how does the average pharmacy pick its way through this minefield?
The key may lie in further developing their own private label range to partly dodge the direct comparisons on price in supermarkets.But it needs to be a wide range.

Newton’s Law states that for every action there is an equal and opposite reaction.

So it would seem to me that branded manufacturers will try to distribute their products into other environments to offset the private label surge.

Pharmacy may yet find itself suddenly back in favour with some brands. 

It seems that the market dynamics for pharmacy may again be on the verge of change.
With PBS margins under the hammer and the medical product range increasing in supermarkets it is obvious that a service-led market would solve an enormous range of pressures on pharmacists and pharmacies.

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