POLICY OF BOOTS

Dominion, Volume 29, Issue 200, 21 May 1936, Page 5

POLICY OF BOOTS

Pharmacy Business In New Zealand NOT MONOPOLISTIC Parliamentary Committee Inquiry Continues Submissions to the effect that the competition of Boots Bure Drug Co., Ltd., had not spread ruin among the chemists of Great Britain, but bad contributed in no small measure to the healthy condition of pharmacy there to-day. and that it could do the same for pharmacy in New Zealand, were made in evidence given on behalf of the company before the Industries and Commerce Committee of the House of Representatives yesterday. The committee is hearing the case for and against the introduction of chain pharmacies into New Zealand. The inquiry will be continued this morning. »

Mr. F. C. Spratt is appearing for the Pharmaceutical Society of New Zealand, Mr. E. T. Hogg for the Friendly Societies’ Dispensaries, Mr. 11. F. O’Leary, K.C., with Mr. IV. 11. Cocker, for Boots Ltd., and Mr. A. H. Johnstone, K.C., for the Wholesale Drug Trade Association of Great Britain. Charles Lindsay Saul sqid he was on the staff of Boots Pure Drug Co., Ltd., and had been employed by that company for 16 years. He was largely concerned with the retail development of tl>e company by the acquisition of new shops and the purchase of chemist businesses. A few years ago his company sent him to America to study conditions there, and he inspected a large number of drug stores. These drug stores, with their soda fountains, candy, tobacco and stationery departments, were to lie found at practically every cross-road in the busy shopping centres, and whether privately owned or belonging to chain store organisations, they followed a more or less standardised pattern. “The chemist shop as we understand the term,” said Mr. Saul,“‘is practically non-existent in America, not so much because it has been crushed or submerged by chain drug stores, but. because for all practical purposes pharmacy in America, long before the introduction of chain stores, was represented by the drug store type, which possibly owed its initial popularity to the fact that it was a conventional meeting place for the general publicin the early settlement days. Our company has always felt that however well these drug stores may be adapted to American conditions, they are not suited to the taste of the British public. We have not copied their physical characteristics m England, and do not intend to do so here. Nor does our company follow their policy of week-end sales or of cutting certain dines below an economic price, temporarily or permanently, to convey a fictitious atmosphere of cheapness. Experience In England. .

“It has been our experience in England that the opening of a new branch of ours has resulted to a large extent in the creation of new and additional business, which would not otherwise have come about,” continued Mr. Saul. “In other words, our turnover has not been entirely at the expense of existing chemist businesses, and there is not t. fixed immutable sum spent on drugs, etc., over a given period and in a given area. Our view is that lower prices bring the commodities within reach of an increased number of potential customers, thereby enlarging the turnover of chemist commodities generally. to the advantage of the public and to that of the trade itself. ‘•There, in our submission, is the reason why the private chemists of Great Britain have prospered and are prospering, in spite of our competition. while the private chemists of New Zealand are in the unenviable position revealed by Mr. lieslops schedule. It is because private chemists in Great Britain have been obliged by The stimulus of our competition to keep prices at a reasonable level, thereby retaining the chemist business within the domain of the chemists to a far greater extent than is the case in New Zealand, ami ultimately more than compensating for their immediate loss in gross profit by their ultimate increase in net profit arising from an increased turnover. ’ Board’s Policy in New Zealand. Mr. Saul said that in Great Britain Boots had far from a monopoly of the chemist business, nor did they aim at one here. Subject to the results of the present inquiry, the board's policy would be one of gradual development, and it was not. the intent ion of Boots to open a large number of shops forthwith, and if suitable businesses were offered to them they would be open to consider them. In Great Britain they had purchased a large number of chemist businesses not under threat or by coercion, but on the basis of a ■ willing buyer and a willing seller. They would welcome an opportunity of extending their activities here in New Zealand on the same basis of mutual advantage. Mr. Saul said he was authorised by Lord Trent to say that when the company'was in a position to justify by actual trading figures any invitation to capital subscription, it would give favourable consideration to an issue open to the New Zealand public. _ Quite apart from any advantages which the erection and operation of a factory might confer on the community, the contention of Boots was that their retail establishments would contribute to the well-being of the general public, especially the poorer sections of it. upon whom up to now the expense of illness must be borne heavily: that their shops in Great Britain had not caused unemployment or distress there among pharmacists, and that the fears of many pharmacists here on that subject were exaggerated: and that there was room in New Zealand ns in Great Britain for healthy competition between the private chemists and Boots, to the ultimate advantage of both. Expenditure in Wellington. Duncan Scott Henderson, general manager and director of Boots I lie Chemists (N.Z.). Ltd., said that they hoped to open their Auckland premises in a few weeks’ time. In addition to the purchase price of their property they had spent, in structural alterations and fittings for their Wellington shop, a sum of over £5OOO in New Zealand material and labour. Up to March 31 they had bought from New Zealand manufacturers, wholesalers and agents, goods to the value of £6500 for sale in their Wellington shop. The company’s policy would be to carry out in New Zealand the policies of the company at Home, and all the privileges and advantages given to employees of Boots in Britain would, as far as possible, be extended to the New- Zealand staff. The company's policy, said Mr. Heji-

dersou. would be to employ practically ill New Zealand staff, bringing from England only the minimum number of senior,assistants who were familiar with the business methods of the. company. Even that would be discontinued at an early date when it had time to train the New Zealand staff. Witli that in view they intended as opportunity arose, to send selected members of their chemist staff to England to see their factories and to obtain some experience in their shops at Home to fit them to take up responsible positions on their return to New Zealand. Factory in New Zealand. Henry Snelson Hibbins said he was manufacturing manager for Boots pure Drug Co., Ltd., Nottingham, and had been in the service of the company for 18 years. He gave details of the part taken by his company in official pharmacy and. in the general development of pharmacy in Great Britain. He said he was sent out to New Zealand by tlie company to investigate resources for the production of pharmaceutical specialities and drugs, and to report upon the question of the company eretcing and operating a factory in New Zealand. He was instructed to investigate l|ie possibility of producing fine chemicals in New Zealand with particular reference to insulin. “1 am satisfied myself,” said Mr. Hibbins, “that it would be in the interests of the company to operate a factory in New Zealand, and 1 am authorised by Lord Trent to state that in the event of no restriction being placed upon the activities of Boots New Zealand Ltd., rhe company will commence tlie erection of a factory in New Zealand Within twelve, months. I have satisfied myself that’there exists in New Zealand a considerable supply di’ raw material which could be utilised for tlie production of fine chemicals. If a factory is established in New Zealand the staff would include a qualified factory manager trained in modern methods of production; a research cheiliist and an analytical chemist. It is hoped that tlie rest of the labour could be recruited in New Zealand.” This concluded the evidence for Boots.

E. W. Nicolaus, Wellington, said that a.s a representative of the general consuming public, he challenged the right of any special interest to petition a Government to restrict open and fair competition in its particular commodities. Free and fair competition was beneficial to the public, and the only safeguard against monopoly and profiteering. He further protested as a taxpayer against any individual or company of individuals seeking material and legal aid from tlie Government for (be benefit of its private interests. The committee adjourned until HO a.m. to-day.