Australia’s competition watchdog has raised a raft of red flags over Sigma Healthcare’s proposed $8.8 billion tie-up with Chemist Warehouse that is set to catapult the private retailer onto the Australian Securities Exchange. Among its biggest concerns is that the mega-merger of Australia’s biggest pharmacy chain with a major wholesaler would raise barriers to rivals hoping to enter the pharmacy market or extend their footprints.
It also fears it would reduce competition in pharmacy retailing by removing the price pressure Chemist Warehouse and Sigma stores impose on each other and lead to higher prices for customers. Know the news with the 7NEWS app: Download today The Australian Competition and Consumer Commission’s preliminary report, released on Thursday, followed a three-month review of the proposed merger announced by listed Sigma and privately-held Chemist Warehouse in December. Both companies run major pharmacy chains, along with wholesale businesses that supply there own and other smaller pharmacies.
“This is a major structural change for the pharmacy sector, involving the largest pharmacy chain by revenue merging with a key wholesaler to thousands of independent pharmacies that in turn compete against Chemist Warehouse,” commissioner Stephen Ridgeway said. “We have identified a range of preliminary competition concerns, including at the retail level and as a result of the proposed integration of the merged firm across the wholesale and retail level. We.