Countdown Has Commenced And It Is Woolworths’ Pharmacy Being Launched

In an article I wrote on June 1, 2015, I said:
“Influential shareholders of Woolworths are seeking to invite Roger Corbett, the nemesis of Australian pharmacy, back into the fold as chairman.”
“Corbett has been carefully planning succession to his current position of chairman of Fairfax Media Ltd citing very early in the process that his tenure and age are the reasons he will step aside.

Corbett is due to step down as chairman of Fairfax Media in August 2015 and the offer from Woolworths may prove to be ideal for his circumstances coupled with a change in the pharmacy political landscape and pharmacy’s systemic weakness.
It may be too tempting for him to refuse because it will allow him to complete unfinished business regarding pharmacy ownership rules.”

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On December 1 2015 Roger Corbett was appointed as consultant to the Woolworth’s Board and as mentor to both board and management.
Woolworths is currently seeking a new CEO, so the Corbett appointment will give them more time to find a suitable recruit, and no doubt be fully trained and mentored on the job.
His appointment coincided with the completion of his term as a Reserve Bank director, and earlier, stepping down from the Faifax Board.
His appointment was made by Gordon Cairns, the current chairman of the Woolworth’s Board (also known affectionately as “Cocksure Cairns” or “Galloping Gordon”.
Even before he was officially due to start work Roger Corbett was sighted at Woolworth’s Kellyville supermarket with Brad Banducci, CEO of the supermarket division and current CEO aspirant for Woolworths total operation.
He was obviously receiving an early mentoring session and his appointment will obviously require a tick from Roger Corbett.

While Corbett introduced Woolworths to the cash flow benefits of liquor retailing, it was Brad Banducci that actually developed the successful liquor business model before promotion to supermarket CEO.
So Roger has hit the pavement at a brisk run and watch this space as change begins to occur.
And official pharmacy should be aware……very aware!
Because this time round Roger will complete his unfinished business with pharmacy, which I will outline after I illustrate some of the positioning that is being mounted on the chess board of strategy.

Another Gordon Cairns appointment, almost simultaneously with that of Roger Corbett was
the appointment of a new non-executive director,:(who is also Lachlan Murdoch’s right hand woman), Siobhan McKenna.

It’s an interesting choice by Gordon Cairns.
McKenna is an extremely qualified and able company director, and her presence in the board room certainly will be influential in a relationship with News Corp.
Roger Corbett is an infuential member of the Liberal Party
Hence, one of the reasons Roger had to be quit from the Fairfax board was because of potential conflict of interest issues (Newscorp is a Liberal Party major supporter and the generator of hostile media stories against pharmacy when government issues need a certain bias – like when negotiating the 6CPA some very odd and unethical stories emerged).

But she’s also one of the new Prime Minister’s least favourite people.
One of Malcolm Turnbull’s first acts as communications minister was to request McKenna’s resignation (and those of her fellow directors) as chairman of NBN Co, which he promptly received.
McKenna was a former partner at consulting firm McKinsey, on whose advisory board Cairns, until recently, sat.

So that tells me that a direct dialogue between Malcolm Turnbull and official pharmacy needs to be organised as a priority.
It also tells me that if the Pharmacy Guild wish to retain political influence at the grass roots level, then it should consider publishing its own newspaper-like publication directed to an intelligent population and distributed from as many pharmacies as possible.
And that it should also have a website attached to the online version of the publication where politically focussed messages and additional resources are made available for those persons interested in rallying to the pharmacy cause.
Some years ago I wrote some material regarding the “dumbing down” of our society through concentration of media interests.
If you hadn’t noticed, this process has increased globally, and in Australia, with the Murdoch press leading the pack with ownership of 70 percent of print media publications, plus a dubious morality as demonstrated through the behaviour of NewsCorp UK amidst phone hacking scandals.
Incidentally, James Murdoch, who was in the middle of all of the UK debacle, and until recently, sat on the board of pharmaceutical giant GlaxoSmithKline (GSK) and he may have been responsible for the lobby and influence of Australian government vaccine policy, particularly the decision to strip welfare payments from parents who did not want to vaccinate their children.
This decision may or may not have been a result of the former prime minister, Tony Abbott, being a friend of Rupert Murdoch and his family’s strong connection with GSK.

There are some cynics who have stated that for his time, Roger Corbett was one of the few people who understood how a supermarket should function. They further claim that when Corbett left Woolworths, shoppers had never heard of self-service checkouts and had certainly never used one, online sales of groceries had not begun, Aldi had a less influential market share and Wesfarmers had not yet purchased, and fixed, Coles.

But what commentators have missed is that Corbett has been an active board member of the US supermarket giant Walmart and was actively involved with the development of a new type of store with a pharmacy as a fulcrum (to give a health flavour).
More, he integrated the health focus found in other departments such as bulk foods and fresh foods, and integrated these departments, while simultaneously upgrading pharmacists as managers into the line-management structure.

Previously, the pharmacy was located in a backwash position and pharmacy managers ignored in the general scheme of things.
Roger Corbett has never relaxed his focus on his pharmacy ownership dream and it has to be said that the Walmart pharmacy success has been found in the establishment of walk-in clinics.
Woolworths already own pharmacies and their health and wellbeing focus is straight out of the Roger Corbett text book.
This is a “Health Destination Store”(at the link below).
Have a look at this link for the Countdown supermarket Woolworths owned operation in New Zealand.
The following is a press release disclosing results from the non-pharmacy sections of the Countdown supermarket after a winter period:

With the recent spike in flu-like illness, New Zealanders are increasingly turning to old-fashioned cough and cold remedies made with fresh fruit and vegetables.

Countdown’s figures for June show sales of honey were up 18% compared to the same period last year, sales of ginger were up 26% and lemons have skyrocketed with a 32% increase in sales.

As the country collectively catches a cold, more bunged up Kiwis are brewing up the traditional soothing remedy of hot water combined with freshly squeezed lemon, generous chunks of fresh ginger and a good dollop of honey to combat the virus’ symptoms.

According to the latest Ministry of Health figures, New Zealand is now well and truly into the winter flu season and the number of people experiencing symptoms of the H3N2 strain of flu is significantly higher than last year.

Countdown’s Health Merchandise Manager Fiona Pointon said there was often a small rise in sales of natural cold and flu remedies during winter, but this year’s recent rise was higher than expected and may reflect a particularly severe cold and flu season.

“This year it seems people are increasingly turning to the tried and true remedies that are proven to be an effective way to fight off symptoms of cold and flu.” Pointon said. “A hot drink of lemon, honey and ginger is a great boost to the immune system and can help soothe an upset stomach and sore throat.”

Countdown’s figures show other cold and flu staples have also seen a rise over June last year, including:

  • Hand sanitiser – up 27%
  • Cough medicines – up 9%
  • Vitamin C supplements – up 9%
  • Tissues – up 7%

“Disposable tissues and clean hands are some of the easiest ways you can help prevent the spread of cold and flu, and it’s great to see uptake in these areas,” said Pointon.

Globally, supermarkets with pharmacies have not shone in terms of profit – unless they featured walk-in clinics.
In the UK supermarket chains are selling their pharmacies to groups like Lloydspharmacy Group who are rapidly expanding – focusing on clinics and triage services from a health bar at the front of the pharmacy.
This has proved a winning combination and they are now part of the world’s largest global pharmacy conglomerate.

US supermarkets have had a longer experience with walk-in clinics and are showing signs of growth and profit with clinics leading the way.
Walmart is replacing all of its independent leased clinics with its own model.

So what will the future Woolworths’ pharmacy in Australia look like?

Look no further than New Zealand where Woolworths, through their wholly owned subsidiary, Countdown supermarkets, have been progressively developing their model, and they already have a written agreement with Walmart.
A future Australian Woolworths may include Walmart as a major partner in their total enterprise.

Pharmacies within the Countdown environment are controlled by companies where pharmacists have a 51 percent control and Woolworths 49 percent.

Note the Woolworths logo - they "own" the complete presentation with no pharmacist identification or evidence of ownership.
Note the Woolworths logo – they “own” the complete presentation with no pharmacist identification or evidence of ownership.

But Countdown controls the marketing elements of the pharmacy – its design, its placement within the supermarket, its advertising, staff training and recruitment.
The trading name and logo are also controlled by Countdown, as is the lease.
They are able to evict a pharmacist at the end of a lease period or when they are in breach of any conditions contained in the lease-and those conditions may not necessarily relate to normal occupancy conditions.
Guess what will happen when the Countdown political lobby is able to have legislation enacted so they can own 100 percent of a pharmacy?
They will be able to own pharmacies without any pharmacist ownership whatsoever.

Sussan Ley, while pretending to be even-handed towards pharmacists has actually achieved a systemic weakening of Australian pharmacy and this is continuing through the period of the 6CPA with an investigation into pharmacy location rules.

I2P believes the report is already written and the Pharmacy Guild has not yet readied itself for the next big fight.
I2P further believes that the Pharmacy Guild may have compromised its negotiating position with the Department of Health, and this is the reason why pharmacy has been able to be manouevered into a progressively weaker state.

The PGA may be raising the flag belatedly in respect of clinical services, but it has had over 35 years to think about this position and has, in the past, worked to actively suppress clinical service development.

When 7CPA negotiations begin we may see an entrenched Liberal Party still in power, and at the end of 7CPA there will be a deregulation of pharmacy ownership, unless the Pharmacy Guild is able to tidy up its act and start its defence right now.
Because of the leadership style and the entrenched conflict of interest continuing problems, I cannot see a happy outcome for pharmacists.

This timetable, incidentally coincides perfectly with that of Roger Corbett.
First he has to re-capitalise Woolworths (5 years, and location rules removed), then he has a second 5-year period to redesign Woolworths supermarkets to “health destination stores” while lobbying politicians at every opportunity regarding ownership.
It is ironic that Woolworths management has made every mistake in the book and has wiped $’s millions off shareholder funds
It has recently been hit with action from the ACCC for “unconscionable conduct” against its suppliers, and 
this company with health designs will continue to sell alcohol, tobacco, and poor quality foods laced with aspartame, trans-fats, salt and sugar.

But the economic rationalists within the current government see Woolworths as the perfect example of providing cheap healthcare compared to pharmacist-owned models.

The equation is not evenly balanced because of the people injured through their retailing of non-health products, who are also being exposed to the highest supermarket profit margins compared to any international supermarkets, resulting in a high-cost health model creating more ill persons than well persons.
Nor do we hear about their other alcohol retailing subsidiaries, including hotels, bottle shops and the fact that they are Australia’s biggest owners and promoters of poker machines.

It is a flawed company as a health model and is a most unsuitable candidate to manage community health if ever there was one.
There has been very little pharmacy media/bulletin board discussions around this threat that won’t go away.
Why is that?
Make no mistake.
Community pharmacy is now in a countdown pattern with a maximum duration of ten years to open ownership.
Unless there is disruptive and major political intervention now across a united profession, community pharmacies owned by pharmacists will recede to marginal and isolated sites.
Only a handful of pharmacists will have the resources to stand up to what is now shaping up to be a global onslaught on Australian community pharmacy and the entire profession will lose that individual spark of innovation and dedication to patient care because of it.
Our entire nation will be the poorer because of this loss of personal contact by pharmacists with their communities..
Extra reading:
Walmart Is Rolling out a Primary Health Care “whole of store” Concept

Pharmacy Nemesis Roger Corbett – Back to the Future

Countdown Pharmacy (Woolworths NZ) – A Preliminary Analysis
Story found at the foot of the page)

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