In its campaign to move into the protected pharmacies industry, Woolworths is promising hundreds of millions of dollars of cost savings.

But pharmacies are a highly-protected industry, like taxi cab licences. While consumers may benefit at first, as Woolies and Coles grew their levels of control, the competitors would disappear. It’s happened before in supermarkets and it’s happened in liquor.

At risk are the suburban pharmacies. They are closer to customers than supermarkets can ever be. Expecting consumers to travel kilometres to go to a Woolies or Coles pharmacy after going to the doctors would be a big ask, so to make their move work both Coles and Woolies would need to drive many suburban pharmacies out of business.

Peter Fray

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