Newfoundland and Labrador Govt. delivering for Shoppers Drug Mart

Shoppers CEO predicts DOOM for Independents

The Newfoundland and Labrador government is about to serve a central Canadian company - local businesses on a platter.

With 100 million local dollars invested in the provincial economy - independent pharmacies have been told by their government that they don't matter.

As witnessed in the House of Assembly - PC Cabinet members and backbenchers chided these local owners with calls to show their T-4's and state where they take vacations.

The general assertion of government is that independents are filling their pockets with rebates.

Despite the lies and misleading statements by these politicians - Shoppers Drug Mart's CEO is backing up what the independent stores  have been warning against.

In the Globe and Mail yesterday Domenic Pilla spells it out clearly for all to see.
 

“We are facing the single worst commercial environment that the drug sector has ever faced … But who is in the absolute best position in Canada to weather that – in some cases to take advantage of that? It’s Shoppers Drug Mart.”

He said that as the country’s largest drugstore chain, Shoppers is best positioned to navigate the road ahead, with economies of scale to help it lower its costs.

And he wants to buy competitors as reduced government reimbursements start to squeeze smaller rivals, he said. “That’s a freight train accident waiting to happen. How it will happen and how quickly it will happen ... is something that is still to be told.” 

His estimated that Shoppers pharmacies probably could add another 30 per cent more prescription files without having to invest in fixed costs. “That would make acquisitions for us very accretive.”

Newfoundland and Labrador's Minister of Innovation, Business and Rural Development might want to look long and hard in the mirror today - as he personally participated in the likely destruction of local investors. 

As Shoppers talks about chewing up local businesses - it does so while saying they don't have to invest a cent in fixed assets. The government of Newfoundland and Labrador is clearly stating their position on local business and investment. 

To top it all off the monies lost to the treasury - particularly monies needed for health - will far outweigh any potential savings to the government from their new generic drug pricing model. 

Further the services provided by these independents - that will be lost from the policy will cost the government tens of millions more. 

Particularly puzzling is the government's insistence that these independents sit at a table with Shoppers employees and come to a common position. What might that be? We the independents agree to turn over our investments to you as cheaply as we can? 

The buffoonery in the House of Assembly underscores the actual ignorance or complicit behavior that will in the end ruin local business, diminish front-line health services, and drive the costs of those services through the roof. 

Bravo - why not stand in your place and take a bow.