Australia’s wealthy pharmacy barons revealed
Australia’s pharmacy sector is now made up of four major groups controlled by big business. Here are the wealthy barons behind them.
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In recent years Australia’s pharmacy sector has become concentrated into four major groups with very big businesses controlling them through franchising or branding arrangements.
Retail giant Wesfarmers which owns Kmart and Bunnings is a very big player in pharmacy.
The other large group is New Zealand firm EBOS which also owns pharmacy software and support and supply services.
Chemist Warehouse is a major discounting chain that became successful by discounting medicine prices. It sells many medicines for half price and is one of the few groups to pass on the $1 discount of the PBS co-payment to customers.
The analysis of their ownership comes as nearly a million Australians can’t afford their medicines but a powerful group representing pharmacy owners wants to stop a plan to cut prescription prices in half.
See who Australia’s pharmacy barons are:
PHARMACY BARONS
PHARMACY GUILD AUSTRALIA
President: Professor Trent Twomey
Brands: Owns franchising group Alive Pharmacy Warehouse Group with his wife Georgina who is managing director. The group has 7 stores in Cairns and one in Gladstone.
Pay Packet: Salary from Pharmacy Guild $396,594. He also receives a non-cash benefit of $32,284 from the Guild for spousal travel and is paid an additional $18,000 in rent to an entity controlled by his wife Georgina. In 2022 Australia’s largest generic medicines company Arrotex took Mr Twomey, his wife and 20 other chemists on a ritzy jaunt to London during Wimbledon. Guests stayed at the $1 billion, $1160 a night “super boutique” hotel The Londoner. Day four of the conference program saw attendees spend all day at the Wimbledon Men’s and Ladies’ quarterfinals at the Rosewater Pavilion where they were served vintage champagne and experienced “beautifully landscaped gardens, subtle floral touchpoints, and British-inspired four course a la carte food and drinks menus personify the theme of tennis in an English garden, all making for an unforgettable experience. A brochure promised “in keeping with the Best of British theme, you’ll have the opportunity to meet a former British tennis celebrity”. According to Koobit this package sells for around £2600 ($A4435) per day.
WESFARMERS
Managing Director: Rob Scott
Brands: Brands: Owns Australian Pharmaceutical Industries Limited (API) which supplies and provides retail support to 76 Priceline stores, 390 Priceline Pharmacy franchise stores and 92 Clear Skincare outlets, 43 Soul Pattinson stores 53 Pharmacist Advice pharmacies. It also owns a national wholesale distributor supplying more than 2500 pharmacies. It owns Instantscripts a telehealth services that provides online doctors services and it is the process of acquiring SILK Laser Australia.
Profit: The entire business including K-Mart, Bunnings and Officeworks made a profit of $2.465 billion for the year ended 30 June 2023, an increase of $113 million or 4.8 per cent on the year before. Wesfarmers Health revenue was $5.3b for the year, with earnings of $45 million.
Dividends: It paid shareholders a dividend of $1.91 per share, up 6.1 per cent of the year before.
Pay packet: Mr Scott received a salary of $2.5 million and was awarded a $100,000 a year pay rise in July. He also has $2.4 million in deferred shares in the company plus an additional $2.5 million worth of performance shares. In April 2023 he sold more than 174,000 of the company’s shares for $9 million.
Rob Scott won a silver medal in rowing for Australia in Atlanta in 1996. He is married to Australian Olympic water polo gold medallist Liz Weekes. The Australian Financial Review reports that he owns a 1000-plus bottle wine collection.
EBOS
CEO: John Cullity
Brands: Presides over a franchise network of 550 Terry White chemists, 70 Health Save Pharmacies, owns stake in the 48-strong Good Price Pharmacy Warehouse franchise, owns Ventura Health franchise (80 pharmacies including MegaSave Chemists, Max Value Pharmacies, Better Buy Pharmacies, My Medical Pharmacies and Cincotta Discount Chemist). Provides retail support to 800 independent Pharmacy Choice pharmacies. The group owns pharmacy wholesaler Symbion, the Endeavour Healthcare group and software supplier Minfos. It also owns Doseaid, a major supplier of medicines packaged in Webster packs for easy use, plus major petcare brands and several pharmacy groups in New Zealand. It runs the Intellipharm loyalty program. It also owns major petcare brands and several pharmacy groups in New Zealand.
Profit: In the financial year ending June 2023 the company made a profit of $281.8 million. In Australia, healthcare revenue increased to $9.4 billion and earnings before interest, taxes, depreciation, and amortisation increased to $416.0 million up 27.5 per cent. Revenue from community pharmacy was $7.3 billion, up almost $1 billion from 2022.
Dividend: Interim dividend of $1.10
Pay Packet: $7.75 million (includes salary and shares) an increase of $1.9 million on the year before.
John Cullity has a Bachelor of Economics from Monash University and worked his way up from the position of Chief Financial Officer.
CW GROUP HOLDINGS (CHEMIST WAREHOUSE GROUP)
Co-founders: Jack Gance, Sam Gance and Mario Verrocchi
CEO: Mario Verrocchi
Brands: 500 Chemist Warehouse pharmacies though franchising arrangements, 24 My Chemist stores, and My Beauty Spot. It dispenses 25 per cent of all the prescriptions in Australia.
Profit: $385 million profit in 2022.
Dividends: More than $287 million in dividends distributed to shareholders in 2022.
Pay Packet: The Gance family’s estimated worth is $1.3 billion ranking them among Australia’s top 50 richest families in the Forbes Rich list. In October 2021 Sam Gance, purchased a $43 million luxury Toorak property that set an Australian price record for a home sold by auction. Sam Gance is the partner of Real Housewives of Melbourne star Janet Roach.
Jack Gance’s wife Evelyn Gance purchased two mansions next door to each other in Toorak for over $30 million with permission to knock one of them down to create a massive 4260 square metre block.
One of the properties was built in 1925 it has a marble entrance foyer, granite kitchen, library, office, heated swimming pool, floodlit tennis court, north-facing gardens, garaging for four cars, gas log fireplaces, central heating, plus self-contained accommodation marketed as suitable for a nanny or in-laws. She also owns another Toorak property.
In May 2022 Mario Verrocchi sold a 45.3 hectare former farm in Melbourne’s outer western suburbs for $62.7 million to development giant Central Equity. It lies within the new Melbourne suburb of Quandong. Mr Verrocchi bought a $40 million historic seaside mansion in 2020 dubbed “Downton Abbey” of Australia. It includes a 12 hectare vineyard and a helipad and 63 hectares with beach frontage, less than an hour from Melbourne. Mr Verrocchi also has a mortgage associated with his sister in laws multimillion-dollar property on millionaires row in Hawthorn.
SIGMA HEALTHCARE LTD
CEO: Vikesh Ramsunder
Brands: A network of 1,200 independent and franchised pharmacies including 500 branded pharmacies operating the Amcal, Guardian, Discount Drug Stores and PharmaSave brands. Sigma acquired a 25 per cent stake in telehealth company Doctors on Demand, which offers online consultations with doctors. In June 2023 it won a five-year contract to supply PBS medicines to Chemist Warehouse in a deal that will generate a minimum of $3 billion a year. In return Chemist Warehouse agreed to purchase a 10.7 per cent stake in Sigma and the right to acquire non-core assets from Sigma Healthcare to the value of $24.5 million.
Profit: $1.8 million up $9.1 million on the previous years loss.
Pay Packet: Vikesh Ramsunder earned a salary of $1.044 millions but when superannuation and shares are added his total pay was worth $3.1 million. Mr Ramsunder previously helmed the South African health and beauty and pharmacy retailer Clicks where he worked for 28 years in various positions.
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