ACCC approves pharmacy merge
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Australia’s pharmacy landscape is set for a major shift, with the ACCC approving the merger of Chemist Warehouse and Sigma Healthcare.
Chemist Warehouse, known for its discount-focused stores, and Sigma, a prominent wholesaler and pharmacy franchisor, now have the ACCC’s green light after it accepted Sigma’s commitment to maintaining a competitive environment across the pharmacy supply chain.
“The ACCC found that, with the undertaking, the proposed merger is unlikely to substantially lessen competition,” said ACCC Chair Gina Cass-Gottlieb.
“There is and will continue to be effective competition at all levels of the pharmacy supply chain, capable of constraining a combined Sigma Chemist Warehouse.”
The ACCC’s review required Sigma to ensure that pharmacies in long-term contracts can switch wholesalers without financial penalty, keeping competitive pressures alive.
Other major wholesalers, including Australian Pharmaceutical Industries (API), EBOS, and CH2, are expected to continue as competitors in the wholesale market.
“Critical to our conclusion that a substantial lessening of competition is unlikely is the competitive constraint provided by competing wholesalers including API, EBOS, and CH2,” Cass-Gottlieb added.
The ACCC emphasised that the merger preserves diverse consumer options, from small pharmacies offering personalised services to Chemist Warehouse’s discount-driven model.
Additionally, regulated pricing under the Pharmaceutical Benefits Scheme (PBS) will remain in place for prescription medications.
To address data privacy concerns, Sigma will also be required to safeguard the data of pharmacies that exit its network and comply with the Commonwealth’s Community Service Obligation (CSO) standards for five years, ensuring PBS medicine access nationwide.
This reverse acquisition, first announced in December 2023, allows Chemist Warehouse shareholders to acquire a significant stake in Sigma’s ASX-listed entity.
Final shareholder and Federal Court approvals are still needed.
Full details on the ACCC’s findings are accessible here.
