{"id":72847,"date":"2016-07-29T06:00:00","date_gmt":"2016-07-29T06:00:00","guid":{"rendered":"http:\/\/mostafa.openonline.co.uk\/?guid=e7d711f6cdf0dc4ca3802fb3c6ad5d75"},"modified":"2016-07-29T06:00:00","modified_gmt":"2016-07-29T06:00:00","slug":"press-release-pharmacy-merger-gets-conditional-go-ahead","status":"publish","type":"post","link":"https:\/\/mostafa.openonline.co.uk\/?p=72847","title":{"rendered":"Press release: Pharmacy merger gets conditional go-ahead"},"content":{"rendered":"
\n

Celesio<\/abbr> AG (Celesio<\/abbr>), through its subsidiary Lloyds<\/abbr> Pharmacy Limited (Lloyds<\/abbr>), operates around 1,540 pharmacies across the UK. It intends to acquire Sainsbury\u2019s 277 pharmacies, which are usually located inside Sainsbury\u2019s supermarkets.<\/p>\n

In a summary of its final report<\/a> published today, the inquiry group of independent panel members investigating the merger has identified 12 areas in England and Wales where the 2 companies\u2019 pharmacies are such close competitors that the merger may be expected to lead to a substantial lessening of competition (SLC<\/abbr>).<\/p>\n

The group published its provisional findings<\/a> in April.<\/p>\n

Celesio<\/abbr> will now have to sell a Lloyds<\/abbr> pharmacy in each of the 12 areas to a new owner, approved by the Competition and Markets Authority (CMA<\/abbr>), to maintain the current level of competition for local customers. Celesio<\/abbr> will not be permitted to close these pharmacies.<\/p>\n

Simon Polito, Inquiry Chair, said:<\/p>\n

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Although the price of prescription medicines is fixed and some features of quality, range and service are specified by regulation, pharmacies still compete on various aspects of their offer which are important to customers. Since pharmacies\u2019 total revenue is largely dependent on the number of prescriptions issued, they have an incentive to attract additional customers – who we\u2019ve found are prepared to switch between the 2 companies\u2019 pharmacies, particularly when they are near to each other in a local area.<\/p>\n

In those areas where a Sainsbury\u2019s pharmacy is currently a strong competitor, under common ownership Lloyds<\/abbr> might be able to reduce service quality to increase profits without being concerned about losing customers to a rival.<\/p>\n

By selling the Lloyds<\/abbr> pharmacy in those areas to a new owner with the relevant expertise and the incentive to attract customers through its service quality, we can ensure that customers do not lose out from this deal.<\/p>\n<\/blockquote>\n

The summary and all other information relating to the investigation are available on the case page<\/a>. The full report will also be published there shortly.<\/p>\n

Notes for editors<\/h3>\n
    \n
  1. The CMA<\/abbr> is the UK\u2019s primary competition and consumer authority. It is an independent non-ministerial government department with responsibility for carrying out investigations into mergers, markets and the regulated industries and enforcing competition and consumer law.<\/li>\n
  2. The CMA<\/abbr> referred the case<\/a> for a phase 2 investigation in December 2015<\/a>.<\/li>\n
  3. The UK pharmacy market was estimated to be worth around \u00a314.5 billion in 2014. NHS receipts account for the majority of the market and have been estimated at \u00a310 billion.<\/li>\n
  4. In its provisional findings the CMA<\/abbr> provisionally found SLCs in 13 areas. Following provisional findings the CMA<\/abbr> has reversed its SLC<\/abbr> finding in one area, Sutton Coldfield, but continued to find SLCs in the other 12 areas. These areas are Beaconsfield, Bracknell, Cardiff, Christchurch, Kempston, Kidlington, Leeds, Liverpool, Luton, Reading\/Theale, Sandy\/Potton\/Biggleswade area and Warlingham. The CMA<\/abbr> has determined that these SLCs should be remedied by the sale of one Lloyds<\/abbr> pharmacy in each of the following: Beaconsfield, Bracknell, Cardiff, Christchurch, Kempston, Kidlington, Leeds, Liverpool, Luton, Reading\/Theale, Sandy and Warlingham. In Christchurch and Sandy Celesio<\/abbr> will be able to sell either of the Lloyds<\/abbr> pharmacies in the area. In all other areas the specific Lloyds<\/abbr> pharmacy to be sold has been identified.<\/li>\n
  5. The members of the inquiry group are: Simon Polito<\/a> (Inquiry Chair), Sarah Chambers<\/a>, Stephen Oram<\/a>, and Tim Tutton<\/a>.<\/li>\n
  6. All the CMA<\/abbr>\u2019s functions in phase 2 merger inquiries are performed by inquiry groups chosen from the CMA<\/abbr>\u2019s panel members. The appointed inquiry group are the decision-makers on phase 2 inquiries.<\/li>\n
  7. The CMA<\/abbr>\u2019s panel members come from a variety of backgrounds, including economics, law, accountancy and\/or business; the membership of an inquiry group usually reflects a mix of expertise and experience.<\/li>\n
  8. For more information on the CMA<\/abbr> see our homepage<\/a> or follow us on Twitter @CMAgovuk<\/a>, Flickr<\/a> and LinkedIn<\/a>. Sign up to our email alerts<\/a> to receive updates on mergers cases.<\/li>\n
  9. Enquiries should be directed to Rory Taylor (rory.taylor@cma.gsi.gov.uk<\/a>, 020 3738 6798).<\/li>\n<\/ol>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

    Celesio will have to sell pharmacies in 12 areas of England and Wales as part of its takeover of Sainsbury\u2019s pharmacies.<\/p>\n","protected":false},"author":8,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[13],"tags":[],"_links":{"self":[{"href":"https:\/\/mostafa.openonline.co.uk\/index.php?rest_route=\/wp\/v2\/posts\/72847"}],"collection":[{"href":"https:\/\/mostafa.openonline.co.uk\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/mostafa.openonline.co.uk\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/mostafa.openonline.co.uk\/index.php?rest_route=\/wp\/v2\/users\/8"}],"replies":[{"embeddable":true,"href":"https:\/\/mostafa.openonline.co.uk\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=72847"}],"version-history":[{"count":0,"href":"https:\/\/mostafa.openonline.co.uk\/index.php?rest_route=\/wp\/v2\/posts\/72847\/revisions"}],"wp:attachment":[{"href":"https:\/\/mostafa.openonline.co.uk\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=72847"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/mostafa.openonline.co.uk\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=72847"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/mostafa.openonline.co.uk\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=72847"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}