Together again?

Could Chemist Warehouse and Sigma Healthcare enter a new supply relationship?

Upon learning of speculation around whether the My Chemist/Chemist Warehouse group and Sigma could resume their supply arrangement, Sigma has released a statement clarifying the current status of the relationship between the two groups.

The previous supply arrangement between the two finished up at the end of the last financial year.

Sigma had taken legal action in 2017 against MC/CWH, claiming that under the agreement which had been in place until then, the discounter was not entitled to fulfil its intent to acquire certain products from a different CSO wholesaler.

Ultimately, Sigma decided not to pursue the action, instead entering into a formal negotiation period during which it was decided that the supply relationship would end.

It was decided that EBOS would take over the exclusive wholesale distribution of pharmaceuticals to MC/CWH’s more than 450 pharmacies from 1 July 2019.

In December 2018, it was announced that DHL would supply MC/CWH with front-of-store FMCG items directly into the pharmacy network.

DHL Supply Chain said at the time that the partnership would streamline the MC/CWH group’s supply chain by reducing the reliance on wholesalers.

Sigma Healthcare has now said in a statement that it is negotiating again with MC/CWH for FMCG supply.

“Sigma Healthcare Limited (Sigma) has become aware of market speculation regarding the potential for Sigma to resume the supply of FMCG products to the My Chemist/Chemist Warehouse Group (MC/CW Group),” it said late Friday afternoon.

“Sigma confirms an approach from MC/CW and negotiations between Sigma and MC/CW are ongoing regarding the supply of FMCG products.

“There is no certainty these negotiations will result in an agreement being reached between the parties.

“Sigma will provide a market update once the outcome of these negotiations is agreed.”

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1 Comment

  1. Nicholas Logan

    Suppliers positioning to give CWH a leg up can only be doing so at the expense of everybody else (except share holders?)

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