Chemist Warehouse profits jump as merger partner tells pharmacies ‘don’t panic’

Chemist Warehouse has posted a spike in half-year profits as Sigma Healthcare, the wholesaler and distribution company it hopes to merge with to create an $8.8 business, moves to hose down the concerns of its pharmacy customers about the implications of the proposed merger.

Sigma chief executive Vikesh Ramsunder said the proposed merger would not undercut its existing customer base of more than 1200 pharmacies, 400 of which operate under the Amcal, Discount Drug Store, Guardian and PharmaSave brands. “We’ve treated this as business as usual. And obviously a healthiest, strongest Sigma is better for all our customers. We have greater availability of stock that’s there for them, scale gives us efficiency. So in fact, this helps our customer service levels into the future.”

“The competition comes in price … on the discount you’re willing to provide to win that business,” Ramsunder said. “We’ve probably got fewer customers, but our earnings are improving because we’re not providing as high a discount as we used to previously.“

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