The situation centres on a major Priceline franchisee that runs 92 pharmacies, including 72 under the Priceline banner through individual franchise deals with the brand’s wholesale owner. After years of financial strain, around half of these stores went into receivership in late December, prompting an administrator to step in and launch a sale process. At the same time, new merger rules now require buyers to satisfy regulators before any deal proceeds, which makes this more than just a standard asset sale.
The franchise group reportedly owed secured creditors more than $400 million when receivers were appointed, and the full network is estimated to be worth more than $700 million including debt. While there is strong interest in single stores, the administrator is pushing to sell the pharmacies as a whole network or in clusters, with indicative bids due by the end of February. Industry players such as large discount chains, rival pharmacy groups and private equity firms are all expected to line up but they must show how they will comply with tightened competition and ownership rules.
The main pharmacy lobby is concerned that this sale comes on top of a recent mega merger between a large wholesaler and a major discount pharmacy chain, a deal analysts say gives the combined group control of more than 50% of the market. The lobby has already opposed that merger and it now looks ready to take its concerns over the Priceline auction to the national competition regulator and state pharmacy authorities, arguing that further consolidation could weaken independent operators and reduce long term choice for local communities.
Behind the scenes, the debate seems to be shifting from just who buys the 92 pharmacies to what kind of market structure Australia wants for community pharmacy. On one side, the administrator and Priceline brand owner are trying to keep stores open, pay staff and suppliers and secure a stable future for the network. On the other side, the lobby group and smaller operators fear that another wave of consolidation could lock in the dominance of a few chains for years, even though new merger controls appear designed to slow that trend rather than accelerate it.
