The ACCC is worried about competition after the merger between Chemist Warehouse and another company.

The Australian Competition and Consumer Commission has recently expressed their concerns regarding a potential merger between Sigma Healthcare and Chemist Warehouse. This deal, valued at $8.8 billion, has raised red flags for the ACCC as it could result in a major shift in the structure of the country's pharmacy industry. According to ACCC Commissioner Stephen Ridgeway, the merger would create a powerful company with control over multiple levels of the pharmacy supply chain.

In a statement, Ridgeway stated that this new business model for the pharmacy sector could potentially create barriers for other competitors, limiting their ability to expand or enter the market. This could lead to a decrease in competition, which would ultimately be detrimental to consumers. Sigma, a major wholesaler of prescription medicines, also operates several franchise pharmacies, including Amcal +, Discount Drug Stores, PharmaSave, and Guardian. The ACCC is concerned that these pharmacies, which currently rely on Sigma for their supplies, could be negatively impacted by the merger as Chemist Warehouse may receive preferential treatment.

The ACCC also raised concerns about the potential for Chemist Warehouse to access and use confidential data about its competitors. As Ridgeway explained, this could give the merged company an unfair advantage in targeting rival pharmacies or undermining their operations. At present, independent pharmacies have three main options for wholesale supply and banner or franchise arrangements. However, if the merger goes through, some pharmacies may have to resort to only two options due to the risks and concerns associated with the data sharing aspect.

In response to the ACCC's statement, Sigma's CEO and managing director Vikesh Ramsunder stated that the announcement was not unexpected given the complexity of the proposed transaction. He also assured that Sigma would continue to cooperate with the ACCC during the review process. Ramsunder further emphasized that the merger would allow Sigma to fulfill its regulatory obligations and continue to serve both franchisee and independent pharmacies with competitive offerings. He added that this deal would bring about significant change for all stakeholders involved.

The ACCC is set to make its final decision on the proposed merger on September 5th. Until then, both Sigma and Chemist Warehouse will continue to work closely with the ACCC to address any concerns and ensure that the interests of all parties involved are taken into consideration.

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