November 2002 issue Pharmacy Today magazine
SUPPLIER CONCERN OVER MERGER
Reports of a healthy trading year and a rosy one ahead for Amcal, Guardian and Vantage hasn't allayed the concerns of suppliers.
At a meeting for the groups' suppliers last month, Amcal announced seven new member stores, a 40% increase in promotional sales and a trebling of its buying group purchases in 2002. Vantage and Guardian were also upbeat in their last years performances.
But the main intention of the gathering was to put forward the group's marketing strategies for the coming year.
Supplier representatives voiced concerns that Unichem's acquisition of Amcal and Guardian would mean one buying group would be formed, putting downward pressure on prices and stronger demands for suppliers to increase their promotional spending.
Amcal's general manager Barry Munnik said the groups maintain their own separate market identities under two buying groups.
"After the merger, we believe the groups will operate with a certain amount of independence and autonomy."
He said Unichem's future direction is soon to be examined by a group specifically assembled for the task.
On condition of anominity, one supplier told Pharmacy Today his company is steadying itself for a significant lessening of its negotiating position and a rise in the cost of promoting brands when half a dozen groups are eventually represented by one buying agent.
"It looks like we might be heading towards an environment similar to supermarkets and that will require a delicate balancing act for all of us."
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