The merger of Terry White Group and Chemmart will see the rise of a new, giant pharmacy network with a frontline professional service focus, says Terry White Group CEO Anthony White.
Last week it was announced that the two would merge to form a retail pharmacy network with a combined retail turnover of $2 billion and around 500 pharmacies.
The proposed merger is subject to Terry White Group Limited shareholder approval and will be put to a vote at an Extraordinary General Meeting planned for late September 2016.
Terry White and Chemplus merged in May 2015, and around 15 Chemplus pharmacies have converted to the Terry White brand, White told the AJP.
When asked how the new network will be placed to offer an alternative to discount models, White said that in recent years, there has been a focus on repositioning the Terry White Chemists brand to represent “real value for money and front line health services to increase our competitiveness in the market”.
The merger will allow the group to leverage significant scale advantages to be “far more competitive,” he says.
“Throughout this process, it has been paramount to us to build up the front line health offering and this will be a key focus for the merged group,” White says.
“We are all health-focused community pharmacy networks, committed to deliver very high levels of customer service and trusted prices.
“As a combined group, we plan on capitalising on our strengths around best access to front line health services and great value for money.”
The group aims to become the choice for Australian consumers for health and the delivery of front line health services,” White says.
“The large majority of the pharmacies incorporate a clinic room to provide strong levels of front line health support like our flu vaccination event.
“We believe there will be many opportunities for the combined network to develop new partnerships and build upon the best of what each of the respective networks has been delivering in health and health services to expand the role of our pharmacies in the broader healthcare industry.
“In doing so, we hope to help address the growing gap in chronic care management in Australia and deliver a highly accessible and convenient alternative for our customers.”
Pharmacy Guild executive director David Quilty told SmartCompany that the merger “shouldn’t have much of an impact” on small pharmacies, highlighting that the Terry White Group alone includes more than 200 individually owned pharmacies.
How the new entity will look
Terry White’s network had already expanded with the Chemplus merger, which added 60 Chemplus stores to the 170-strong Terry White network.
White says that last year’s merger with Chemplus has been “a real success story”.
“The integration is proceeding well and has been seamless, with about 15 pharmacies converting to the TWC brand,” he told the AJP.
“We have been able to leverage the complementary strengths of each network to deliver significant benefits to the group including a strengthened foothold in South Australia and increased sales across all categories for our pharmacies.
“We have been able to leverage the scale we achieved through combining the two networks to deliver benefits to consumers including more competitive pricing and expanded product ranges.”
Chemplus, Chemmart and Terry White Pharmacies will continue to operate under their existing brands “for now,” White says.
“One of the key benefits of the merger will be a significant lift in our marketing investment which will allow us to build upon the existing equity and high consumer awareness levels in all three networks to further strengthen our position in the market.
“We plan on launching a new joint initiative in October to increase the profile of all members within the combined group.
“We will work collaboratively with our pharmacy owners over the coming months to create a strengthened collective group with a renewed marketing strategy.”
White says that the merger will also, hopefully, help members capitalise on opportunities within the pharmacy sector as well as resist some of the challenges.
“Australia’s community pharmacy industry presents a lot of opportunities for future growth including an ageing population, expansion of chronic health conditions, primary health care reform, increased life expectancy and the significant shift in consumers’ interest in health,” he told the AJP.
“As a group, we are excited about the opportunities within our industry and believe we are well placed to capitalise on these key market drivers.
“At the same time, the industry is facing challenges in relation to ongoing PBS reforms and general levels of competitiveness in the sector.
“We have invested significantly in developing a sophisticated retail model for our pharmacists, which has resulted in the group achieving above average retail sales growth, with retail sales now comprising more than half of all network sales.
“This has provided our pharmacy owners with a solid revenue stream to help offset the effects of reform and is something we are committed to focus on into the future for pharmacies within the combined group.”