Woolworths joins forces with SuperPharmacy in the health sector, raising Pharmacy Guild concerns

Woolworths’ $20m purchase of SuperPharmacy assets has raised eyebrows at the powerful Pharmacy Guild, which has already launched action.

Woolworths CEO Brad Banducci is expanding the retailer out from its traditional food and grocery operations to push into health and wellness. Photographer: Adam Yip

The powerful Pharmacy Guild is reviewing a move by Woolworths to creep into its industry through a joint venture partnership with chemist operator SuperPharmacy.

The Pharmacy Guild said it would monitor the situation and has contacted state regulators to ensure the Woolworths deal meets strict laws governing the sector.

On Friday Woolworths unveiled a deal to buy the assets of SuperPharmacy — which has both an online health offer and physical stores – with it to rebrand SuperPharmacy’s physical stores and integrate much of the pharmacy business into its existing Woolworths health and wellness platform, HealthyLife.

Both Woolworths and Coles have been for decades eyeing off a move into pharmacies but have consistently been blocked by government and met huge pushback from the powerful Pharmacy Guild. But that hasn’t stopped the supermarkets bolstering their exposure to the health and wellness categories.

Earlier this year Woolworths launched a $850m takeover bid for Australian Pharmaceutical Industries, which was hotly fought by the Pharmacy Guild and later Woolworths abandoned the bid.

Now it looks as though the deal inked with SuperPharmacy has once again raised the ire of the Guild.

The Pharmacy Guild of Australia on Friday noted the announcement of a partnership between Woolworths subsidiary HealthyLife Pharmacy, and pharmacist Warren Turner, and said it was monitoring the development and examining any possible implications of it.

“We have contacted the pharmacy authorities in all jurisdictions across Australia to ensure this partnership meets all the state and territory-based registration requirements that all pharmacies must comply with,” the spokesman said.

“We also note that the federal government, and all state and territory governments, have committed to the continuing support of the existing model of pharmacy.

“This model had proven over many years to be an effective, accessible, safe and reliable provider of health services to communities in all parts of Australia.

“It is protected by legislation at the federal and state and territory levels. The Guild will keep members informed of developments on this issue.”

Under the deal HealthyLife will acquire key technology and warehouse assets and in turn will provide e-commerce, related technology, branding, platform and warehouse wholesale services to SuperPharmacy, under the banner name “HealthyLife Pharmacy”.

The SuperPharmacy physical pharmacy stores will also carry the new retail banner. The deal is understood to be valued at less than $20m.

It will provide Woolworths customers with more convenient access to scheduled and non-scheduled health products and complementary health programs, the supermarket group said.

The deal also strengthens Woolworths’ presence in the health and wellness space, and although as a supermarket it is blocked under current Australian law from directly owning pharmacies it can build up its services into and around the pharmacy sector.

SuperPharmacy has been a partner of Woolworths since 2021 via the Everyday Rewards program and as a third-party merchant on HealthyLife.com.au since August 2022.

The SuperPharmacy group have been providing customers with prescriptions, over-the-counter medicines and wellbeing needs since 2000. The current six physical SuperPharmacy pharmacies located in New South Wales, Victoria, Queensland, South Australia and West Australia will continue to be owned and operated independently but will operate under the HealthyLife Pharmacy banner.

HealthyLife managing director Ananth Sarathy said since launching the business last year, its goal has been to help Australians live healthier lives by providing trusted health advice and a curated range of health and wellness products.

“The pandemic has led to an increase in customers turning to the digital environment for their health needs. SuperPharmacy is complementary to HealthyLife’s existing health and wellness business. The arrangements with SuperPharmacy will enable customers to access their health needs in an efficient way online via the HealthyLife platform and instore at a HealthyLife Pharmacy.”

At a press conference on Friday he said Woolworths had informed the Guild of its deal and that they had a “respectful” discussion. He also said Woolworths had respect for the rules around the pharmacy sector in Australia. Although Mr Sarathy declined to comment on what views the Guild had expressed to Woolworths about the new relationship between it and SuperPharmacy.

Warren Turner, SuperPharmacy proprietor, said: “This is a natural step for SuperPharmacy and HealthyLife. It will provide greater access and the delivery of care as required by our customers seeking to obtain their health and wellness needs online.”

In early 2021 Woolworths launched HealthyLife as its new online marketplace to widen its reach in the fast growing $10bn-plus health and wellness sector. It saw the supermarket giant provide digital health services and advice for the first time under one retail banner.