The Pharmaceutical Journal
Vol 269 No 7217 p455
28 September 2002

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UniChem convention 2002 summary

Wholesalers' service level depends on customer loyalty

If independent pharmacists fail to support their main wholesaler by continuing to select the cheapest prices, thereby diluting the mix of business they give to it, wholesalers will have to reconsider the level of service they provide, warned Martyn Ward, UniChem's marketing director.

"We will at some point have to consider the options available to us to maintain our profitability. These could include such actions as reducing our service, not stocking the slowest selling products, not offering discount on the slowest selling products, or removing all added-value support". UniChem had no intention of carrying out any of these actions but its customers were urged to do more to support the company.

Recent developments within pharmacy, and pressures such as the generics review, the Office of Fair Trading enquiry into contract limitation and new contract negotiations, had evoked a reaction among independent pharmacists that Mr Ward found disappointing. "The overriding reaction has not been to improve the retailing skills, deliver added value via medicines management and local services, but to work tirelessly to save that extra two pence on a pack of fluoxetine."

He acknowledged that the business being transferred to short-line wholesalers was not UniChem's by right but warned that pharmacists would need to consider the consequences of taking the more profitable business away from full-line wholesalers.

The conference participants were probably some of the most compliant and supportive of UniChem's customers but only about 60 per cent of the available spend was given over to UniChem. If customers did not give UniChem enough business to warrant a twice-a-day service then it would have to reconsider its current service profile or implement minimum order values.

"What if you continue to demand retail support schemes from UniChem, utilise our expertise and support material, then purchase products from a different wholesaler? Well, quite simply, we will cease our marketing support and the results will be lower sales for everybody except the supermarkets who, I am sure, will welcome the additional spend with open arms."

Mr Ward concluded that it was up to UniChem to ensure that what it offered its customers was irresistible, but concluded that pharmacists must be supportive if both they and UniChem were to be successful in the future.