CHAIN PHARMACIES

Dominion, Volume 29, Issue 195, 15 May 1936, Page 8

CHAIN PHARMACIES

Evidence on Petitions To Parliament INQUIRY CONTINUES Case For Boots Pure Drug Company Outlined With the completion of evidence for the chemists, the Industries and Commerce Committee of the House of Representatives now inquiring into the system of chain pharmacies, commenced to hear the other side of the case yesterday afternoon. The birth of Boots Pure Drug Company was recalled and its progress down the years was traced in detail. It was submitted that to debar the company from carrying on business in New Zealand was not in the interests of the public. The committee will resume its deliberations next week. Mr. F. C. Spratt is appearing for the Pharmaceutical Society of New Zealand, Mr. A. U. Johnstone, K.C., for the Wholesale Drug Trade Association of Great Britain, Mr. H. F. O’Leary, K.C., with Mr. W. IL Cocker, for Boots Ltd., and Mr. E. T. Hogg for the Friendly Society Dispensaries of New Zealand. Evidence in support of the case presented by the Pharmaceutical Society was given by Charles Leslie Butchers, registrar of the Pharmacy Board of Victoria. He eaid that the Pharmacy Act of Victoria did not permit corporations to carry on the practice of . pharmacy. From personal observations in all of the Australian States he was of opinion that the pharmaceutical profession in V ictori.a was on a high level, mainly because it was a strictly individual one and also because the Pharmacy Board had powers which enabled it to control and discipline pharmacists guilty of improper practice®. He had investigated the conditions under which pharmacists dispensed for members of friendly societies. The dispensing prices were lower in New Zealand than they were in Victoria. His opinion was that pharmacists in New Zealand who were dispensing for friendly societies were operating such service either at a loss or at a very small profit. Mr. Butchers said that the Pharmaceutical Service Guild of Australia had made available the whole of its standardised trade marks to the New Zealand guild free of charge. If chain company pharmacy came into existence in New Zealand it would necessitate reconsideration of that policy and .the possible withdrawal of existing privileges. Big National Problem. The Minister of Industries and Commerce, Hon. D. G. Sullivan: Supposing a firm like Boots was paying the right and dispensing prescriptions at a reasonable price, what' would you say would be the disadvantage, from a public interest point of view, of allowing it to operate? “I see your point, replied Mr. Butchers, “It would mean a revolutionary change in the business. Possibly shops would have to be licensed, a restriction placed on the number of apprentices, and fixation of prices by some independent authority. All those things might be necessary before one could say that the public interest was fully protected.” The Minister asked Mr. Butchers whether he agreed that it was really a national question as to whether it was desirable to have huge combinations of overseas capital exercising an influence in the economic life of the country. Mr. Butcher: That is so. The Minister: I mean that the matter lias no special relationship to chemists. I have had representations from other citizens who are competing against combinations of capital. . Mr. Butchers said he agreed it was a big economic question. He thought, however, that in the long run it would be found that the chain store principle was not in the interests of the country. Rights of Friendly Societies. Mr. Hogg, in addressing the committee on behalf of the friendly society dispensaries of New Zealand, said that the dispensaries maintained that they played a very real part in the social services of the country and any disruption of their organisation would result in a burden being thrown on the hospital boards and other institutions. The dispensaries asked to be allowed to retain their existing rights. Evidence was given by Ivan James Mackersey that there were 30 friendlv societies’ dispensaries in New Zealand, 29 of which were incorporated under the Friendly Societies Act. and one under the Companies Act. All had as their objects the dispensing of medical and surgical benefits to the members of constituent lodges. The dispensaries repre-

sented between 55,000 and 60,000 members who, with their dependants, made a total of some 200,000 persons. Any Bill to amend the Pharmacy Act should reserve powers for the dispensaries to dispense benefits to their members. “We desire also,” said Mr. Mackersey, “to retain our power to incorporate under the Companies Act and would prefer that there be an express power given to us to do this. As already stated one dispensary i.M incorporated under that Act, and the Wellington dispensary is taking steps to register n company for the purpose of having the protection that the Companies Act affords.” Speaking on behalf of the Wholesale Drug Trade Association of Great Britain, Mr. Johnetone said that his clients joined wholeheartedly with their customers in New Zealand in urging that in the public interest and in the interests of what they deemed to lie a useful and necessary profession, chain pharmacies should not be permitted in the Dominion, and that the dispensing and compounding of drugs should be in the hands of trained individuals only and not of purely commercial co-operatives. Caso for Boots. Mr. O’Leary, in opening his case, submitted that if the prayer of the petitioners against Boots was reported on favourably and legislation was introduced, the result would be that New’ Zealand would be barring an organisation which would be an asset to the country. Boots Pure Drug Company—known as Boots the Chemists in every household in the United Kingdom—owned nearly 1100 branches in 600 towns. It was the largest firm of retail chemists in the British Empire, if not in the world, and employed a labour force of 19,000 workers In 1860, said Mr. O’Leary, a boy aged JO left school to help his widowed mother to run a small herbalist shop in a side street in Nottingham. The boy’s name was Jesse Boot. He was in control of the shop by the time he was 13, and he soon conceived the idea which led eventually to the development of the present organisation. Finding _ that the drugs necessary for the alleviation of suffering and the prevention of ills were being sold by most retailers at prices that made them a luxury of the well-to-do, he came to the conclusion that it should, be possible to sell them at moderate prices to the advantage of everybody. He devoted himself to a study of pharmacy, and was soon selling drugs at greatly reduced prices. If Jesse Boot’s activities were at times resented by those witli whom he competed, he also made many friends among the general public, and, in spite of many difficulties, he succeeded. By the time lie !vas 30 he controlled 10 shops under bis own name, and in 1888 the fast-growing concern was given its present name of Boots Pure Drug Company. Its subsequent development was spectacular, for the public was quick to appreciate the supply of good drugs at reasonable prices. Mr. O’Leary said that the growth of Boots had not'depended solely on the preparation and sale of known and established drugs. A research department was set up many years ago, its purpose being to improve and standardise the products then marketed and to develop new ones. Close co-operation with hospitals had led to many, achievements tn the development of clinical medicine. Welfare of Employees. In the minds of the present Lord Trent (head of the firm) and of his father, the service of their employees had ranked second only to the service of their customers. As soon as the company began to prosper and expand, the organised welfare of the workers became a predominant interest with the owners. Sports grounds, social and other clubs, together with highly-equipped welfare departments under expert medical supervision, and a school for the younger members of the firm, had long been established. In 1897 the company began to set aside annual sums of money to form a pension fund for qualified chemists. By 1918 the fund amounted -to £120,000, and a pension scheme was put into operation. In addition, a health insurance scheme for Boots’ workers, of which the company had paid all administration costs, had been developed. In the belief that there was an obligation on employers to “give their employees the widest possible opportunities to make the best of their lives,” Lord Trent ‘had lately put in Io operation a wide system of pension schemes covering all types of workers. In his public speeches Lord Trent had frequently debated the question of shorter working hours, with its bearing on output, cost, and service to the public. In fulfilment of his personal convictions, he had reduced the working hours of his shops' managers by giving them an extra week’s holiday on full pay. while at the company’s factory and headquarters he had introduced the five-day week without reduction of pay. Lord Trent, had stated that any factory opened in New Zealand would be run on a five-day week basis. 5 British Control. Lord Trent, said Mr. O’Leary, had also intimated the company's willingness to co-operate with the Government in the establishment of a national health scheme in New Zealand. The committee should know that of the total business of the company in England 87 per cent, was confined strictly to pharmacy. The entire control was in British hands. The capital was three millions, and the average holding was 300 shares at 5/- each. Mr. O’Leary outlined the events leading up to Boots starting in New Zealand. He said that in 1923 Boots the Chemists, New Zealand, Ltd., was registered as. a company with a capital of £lOO. The reason for its registration was that at that time well-known names of overseas firms were being appropriated by people here, and Boots wanted to protect its own name. The company at that tune had no intention of starting in New Zealand, but apparently its intentions were misinterpreted and its wholesale business in the Dominion was boycotted by the New’ Zealand chemists. The position was allowed to remain for many years. lii 1925 a delegation came to New Zealand to investigate the prospects of business here. The'results of the investigation were favourable, and it was decided to make a start by opening a shop in Wellington, and another in Auckland. The company agreed not to extend further pending a certain course of action by the controllers o 7 Boots. That condition, as a matter of fact, had now lapsed, and the company, so far as the law was concerned, was free to go ahead, but, of course, it was awaiting the result of the present inquiry, Mr. O’Leary submitted that Boots were not a chain store in the true sense of the word. They were chemists, and their stock was rio different from that carried by any well-equipped chemist in Wellington, or elsewhere. They did not pick the eyes out of other people’s businesses. Boots’s vended their prescriptions at moderate prices and allowed themselves a fair return only. There could be no mass production of prescriptions. “If you prevent Boots from carrying on business here you will bring about, an abandonment of the competitive principle and destroy a public advantage,” added Mr. O’Leary. The committee adjourned until 10 a.m. on Wednesday next, when three witnesses for Boots will bo called.