EBOS Group will become the third-party distributor to more than 400 Chemist Warehouse and My Chemist stores across Australia.
It is expected that the parties will enter into a five year supply agreement, with the potential of a three year extension, generating an estimated $1 billion within the first year.
“To be selected as a trusted partner by Chemist Warehouse Group reinforces our capital investment strategy and reflects the efficiencies we have made over a number of years to our operations,” said EBOS Group CEO John Cullity.
“It’s a great endorsement of EBOS’s wholesale pharmacy business, and reflects the high level of expertise and service standards that we offer the industry more broadly.”
Chairman Mark Waller said the business had invested diligently to ensure it would be able to service an agreement of this nature, pointing out a number of new, highly automated distribution centres in Sydney, Melbourne and, soon, Brisbane.
These major investments have significantly improved both our productivity and efficiency levels and lowered our operating costs,” Waller said.
“Today’s announcement is a strong validation of that investment and we’re well equipped to meet growing demand across the entire industry, including from our existing customers, and continue to uphold the high standards we set.”
The My Chemist Group is ultimately controlled by an entity called East Yarra Friendly Society, which Gance and Verrochi acquired in 2002.
At the time, friendly societies were not restricted in the number of pharmacies the group could own and the then-dormant East Yarra Friendly Society provided the initial platform for expansion.
Subsequently, Chemist Warehouse has developed a franchise system to allow the chain to expand without offending the pharmacy ownership restrictions.
- This article first appeared on Inside Retail, a sibling publication of Inside Franchise Business.