Australia’s Largest Pharmacy Brand Reels in Massive Profits Over Pandemic Years

Signage is seen at the Chemist Warehouse store, at The Grove Liverpool shopping site, in Sydney, on Dec 2, 2021. (AAP Image/Bianca De Marchi)

Revenue for Australia’s largest pharmacy franchise, Chemist Warehouse, surged past A$3 billion (US$1.8 billion) for the first time, making it one of the most profitable private companies in the country.

The record haul comes amid a surge of online shopping during the pandemic lockdowns, as well as a shift towards customers shopping online.

“The group was able to respond effectively to the difficulties presented by COVID as consumers looked for cost-effective pharmaceutical, healthcare and beauty products,” according to financial notes seen by The Australian newspaper.

“Pharmacies were classified as essential services and were able to remain open even during periods of government imposed lockdowns impacting retail trade.”

The company did experience softer retail conditions, however, particularly in CBD or major shopping centres due government restrictions.

“However, this has been offset to some extent by greater demand for pandemic related product lines and the continued acceleration of online sales due to a shift in consumer preference.”

Chemist Warehouse’s net profit for the 2021-22 financial year was A$385 million, up 27 percent from the previous year.

Co-founders Jack Gance and Mario Verrocchi’s respective families were reported to share $155 million in dividends from the 2021-2022 financial year. Then in late September, they declared another dividend of $132 million.

Contemplating an ASX Float

The company’s directors are contemplating a business model change, which could be a precursor to a float, according to The Australian.

Launching an ASX float could value the company at more than $5 billion.

However the move has reportedly not been approved by the Pharmacy Council of NSW (PCNSW).

“A process of engagement with the PCNSW is ongoing and directors expect a successful outcome will be achieved,” the Pharmacy Council of NSW said.

Ownership of pharmacies is highly regulated in Australia. One such regulation is that owners must get approval from the nation’s pharmacy guild to open a business or change its location; the rules also prevent pharmacists from opening up a new store within 1.5 kilometres of an existing store, reported The Sydney Morning Herald.

Australia’s pharmacy guild and small business owners says the rules and regulations are intended to protect the integrity of patient care, while the Australian Medical Association has said that the rules are anti-competitive and should be relaxed.

Chemist Warehouse is part of the My Chemist Retail Group, with more than 500 stores and more than 17,000 stores nationwide.

The Epoch Times has reached out to Chemist Warehouse for comment.