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Lloyds told to sell stores in Sainsbury's deal

Lloydspharmacy: Will continue to work with the CMA throughout investigation

The multiple will have to sell at least one pharmacy in each of 13 areas where a takeover would restrict patient choice, the competition watchdog has said

Lloydspharmacy must sell branches in 13 areas if its planned merger with Sainsbury’s pharmacy business is to go ahead, the government’s competition watchdog has said.

In a provisional ruling on the deal, the Competition and Markets Authority (CMA) said the multiple could resolve concerns that the £125 million deal could reduce patient choice if it sells at least one Lloydspharmacy branch in each of the affected areas across England and Wales.

The CMA said today (April 29) that it is inviting written responses to the initial findings of an in-depth investigation it is conducting into the deal by May 23. It expects to make a decision in June on whether the deal can go ahead.

Lloydspharmacy told C+D it has been working closely with the CMA throughout the investigation, and will continue to do so until it is complete.

Sainsbury’s stressed that both businesses “remain committed” to the deal. It looks forward to working with Lloydspharmacy on “growing and extending” its pharmacy services, it told C+D.

C+D has asked Lloydspharmacy whether it will consider selling its pharmacies in the affected areas.

In December, Day Lewis chief executive Kirit Patel told C+D the multiple would be "very keen" to purchase branches of Lloydspharmacy if this was required by the CMA.

What has the investigation found so far?

In an in-depth investigation into the merger that began in December, the CMA found customers in the affected areas, which include Cardiff and Beaconsfield, could “lose out” if a deal were to go ahead.

These customers would experience a "substantial lessening of competition", as there would be less incentive for pharmacies to compete on service quality, the CMA said.

How could Lloydspharmacy resolve the concerns?

The CMA proposes that Lloydspharmacy should be given a list of which pharmacies it could choose to sell in each of the affected areas. In some areas, it may only be necessary for one branch to be sold, it said.

These sales would need to be “attractive” to potential buyers and enable the purchaser to trade effectively as an “independent competitor”, the CMA said. The prospective buyers would be vetted by the CMA to ensure they are independent of both Lloydspharmacy and Sainsbury’s, and could compete with the business, it added.

The CMA does not think it would be necessary for Lloydspharmacy to complete the sales before the merger goes ahead, it said.

The areas affected by the deal are:

  • Beaconsfield 
  • Bracknell 
  • Cardiff 
  • Christchurch 
  • Kempston 
  • Kidlington 
  • Leeds
  • Liverpool 
  • Luton 
  • Reading (Calcot)/Theale
  • Sandy/Potton/Biggleswade area 
  • Sutton Coldfield 
  • Warlingham 

 


Would you consider buying a Lloydspharmacy branch?

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8 Comments

khalil Jamil, Locum pharmacist

Yes I would consider buying a lloyds pharmacy branch . How ever the big sharks like Day Lewis, Krit Patel, will not give us little finish a chance , to become independent pharmacy contractors . So I ask selling from one multiple to another, is that really giving the public a better choice ?  

R A, Community pharmacist

I wonder how feasible this deal will be for Lloyds as a rule of thumb most of the Lloyds branches they have in their portofolio are high volume dispensing branch. So the idea to dispose of them just to clinch this deal might be a problematic. We need to remember all sainsbury pharmacies are open for 12 hours or more and are very unlikely to have high volume dispensing like Lloyds Pharmacy they probably make more money from over the counter and customer they entice for shopping. I think whats most likely to happen is Sainsbury retaining stores which prove to be an area of conflict so the deal can go through and Sainsbury will probably dispose of these stores later on to another multiple! 

Stephen Eggleston, Community pharmacist

I don't think this is much of a surprise to anyone - the idea of reduction in the number of facias applied in the Boots/Alliance merger so it would seem reasonable for it to apply here. The good news is that it may provide some opportunities for Independants

Dave Downham, Manager

True, but what will stop Lloyds nominating all their patients from the closing branch to the local Saino's just before they pull the shutters down? Also, if they have to sell 1 out of 4, say, they ain't gonna dispose of the profitable one, are they?

Stephen Eggleston, Community pharmacist

I agree, Dave - why would anyone sell the profitable one if you didn't have too. But you would need to ask why is it not profitable? Many independants make a real "go" of apparently unprofitable businesses, mostly due to having a greater vested interest in making it work. And would I transfer nominations to the remaining site? Well, that is a good question, because it raises the issue of patient consent for prescriptions being dispensed by a particular pharmacy or by a pharmacy provider. So, while I would imagine many people might do what you suggest, it does leave then open to complaints etc. (I can almost hear the "multiple-bashers" winding up their ire to explode about GPhC not tackling multiples)

V M, Pharmacy

It should not be allowed at all. Lloydspharmacy are way too big and purchase of these supermarket pharmacies will just make make them even more prominent in the industry. 

Harry Tolly, Pharmacist

"""In an in-depth investigation into the merger that began in December, the CMA found customers in the affected areas, which include Cardiff and Beaconsfield, could “lose out” if a deal were to go ahead.

These customers would experience a "substantial lessening of competition", as there would be less incentive for pharmacies to compete on service quality, the CMA said."""

.........................................................................................................................................................................

And His Royal Excellency, "The Chief Pharmaceutical Officer for England" STILL wants to wipe out 3000 pharmacies and give local monopolies to the multiples.

 

You couldn't make it up !!!

Bal Singh, Locum pharmacist

You could make it up, like that title he has.

Who elected him? How did he get to his position?

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