Walgreens Boots Alliance is musing over Australia’s £11bn retail pharmacy market
Walgreens Boots Alliance registered its trademark with IP Australia late last year and is looking at options to expand in Australia, reported the Sydney Morning Herald, including establishing a Boots franchise network and gaining distribution for its health and beauty brands in local pharmacies.
The group is also keen to acquire Australian health and beauty brands to distribute across its retail and wholesale networks.
“Australians are such great travellers … that brand recognition for Boots is incredibly high here in Australia and it feels a terrible shame to waste the recognition,” said Global Brands President Ken Murphy.
“But there’s almost as much effort that goes into creating a franchise model as an owner model, the returns on investment are a lot tougher, [and] to justify the investment in Australia we’d have to have the capability to establish our own chain,” he said.
“We’d be happy to do that by acquiring pharmacies but we’d have to have the legal permission to do so.”
Boots has been trying to enter the Australian market for over a century. It is understood that Jesse Boot, the son of founder John Boot, set sail to set up shop in Australia, but during his voyage local chemists persuaded the government to enact laws restricting pharmacy ownership to pharmacists and prohibiting ownership by corporations.
“As the government puts the squeeze on healthcare costs and as pharmacists find it increasingly difficult to make money from their prescription businesses I think that will force a change in the market,” Murphy added.
“Also, we invest a lot in pharmacy systems and services and in training of pharmacists – I think more than half the pharmacists in the UK have done their training at Boots – and we have a phenomenal logistics platform and supply chain.”
If ownership restrictions are maintained, Walgreens Boots would consider establishing a new franchise under the Boots banner or establishing a partnership with one of the existing wholesalers.
“I’m in the middle of exploring every option at the moment,” said Murphy.
He is also seeking more stockists for Walgreens Boots’ brands, including Soap and Glory, Boots Laboratories, No 7, Liz Earl and recently acquired colour cosmetics brand, Sleek.
Murphy is also interested in buying or distributing Australian brands that could be sold in Walgreens and Boots stores.
“We are able to give them instant distribution in two of the largest beauty markets in the world,” he explained, “and because we’re a vertically integrated business and have been developing our own brands for 150 years we … understand consumer marketing, we understand brands, we understand product development, so we can help them on a number of levels.”