PHARMACY CHAIN STORES

Dominion, Volume 29, Issue 217, 10 June 1936, Page 10

PHARMACY CHAIN STORES

Views of Legislators LICENSED CHEMISTS’ SHOPS Committee’s Proposals The licensing of chemists’ shops in New Zealand is advocated in the report of-the Industries and Commerce Committee of the House of Representatives on petitions from a large numbet of chemists against the operation of pharmacy chain stores. The report was presented in the House yesterday by the chairman of the committee, Mr. AV. J. Jordan (Government, Manukau). Mr. Jordan said the committee found that the mass production and manufacturing facilities of Boots The Chemists (N.Z.), Limited, enabled them to sell at lower prices than the independent chemists. The evidence tended to prove that there was considerable discrepancy between the prices charged by Boots and those of private chemists and that the latter prices were to a considerable extent an unnecessarily heavy burden owing to overhead costs consequent on the large number of dispensing establishments in operation. The committee was of the opinion that an adequate service could be provided by a smaller number of dispensing establishments. The committee held that steps should be taken to ensure that the community generally .would be able to procure pharmaceutical services at the lowest price compatible with quality and reasonable payment for all necessary work in connection with the service. The recommendations of the committee were listed by Mr. Jordan as follow :— That the organisation of chemists’ services, be regulated by license under the control of the Minister of Industries and Commerce. That the operation of large scale pharmacy companies in New Zealand be not extended for a period of six months in order to enable existing chemists collectively to organise and plan their operations with the object of reducing lhe present scale of prices to the consumer, while at the same time providing an adequate payment for services rendered. That on the expiry of the specified period the position be reviewed by the Government, and should it be proved that existing chemists have not organised so as to adjust prices satisfactorily licenses may be issued to .such companies and persons as may be determined by the Minister of industries and Commerce, That all chemists, if employing assistants, should be required to employ a specified proportion of qualified assistants. That the Government should investigate the possibility of the establishment of a national pharmacy service. A Searching Investigation. / Speaking to the report, Mr. Jordan said that as a result of the searching investigation carried out it had been shown that prices charged for similar prescriptions varied considerably, not only among the several chemists but by one chemist from time to lime. There was a considerable amount of unemployment in the profession, low wages were paid in many cases, and the business had been shown to be to a great measure in a precarious position. “The committee inquired thoroughly into the affairs of Boots The Chemists (New Zealand), Limited.” saitl Mr. Jordan. "The company, which is backed by British capital, is recognised to be a good Jinn, it is a good employer, and it is efficient and enterprising. The committee examined witnesses from Britain, Australia, and front several parts of New Zealand. It was admitted that improvements must be made in the profession, and that is why the committee decided to recommend that the profession be given six months to put its house in order to the satisfaction of the Government. If I hat is not done, we recommend that the Minister should have power to ensure a satisfactory service to the people. "'l'lie committee realises that this is a most important matter, and that the ill-health of th e people is the concern of the State. It is not a matter to speculate in or from which to make an undue profit. It is realised that it is probably more important even than education, and the committee looks to the Government for a competent health insurance scheme which would include the operations of the pharmaceutical services of this country. In. laying this report on tile table to be referred to the Government for consideration, the committee feels that it will continue to have the close attention ot the Minister of Industries and Commerce, Hon. D. (I. Sullivan. who was present throughout the proceedings before the committee.'’ High Cost of ITescfipiians. A suggestion that the Government should give consideration to the attitude adopted by the I’liarnuieeutieal Society toward students from State schools and the universities, was made by Mr. T. H. McCombs (Government, Lyttelton). The society, he said, set for these students a pass standard of 50 per eent., while the students attending a private college in Wellington were allowed a pass if they obtained -10 per eent. Mr. E. J. Howard (Government, Christchurch South): Who conducts the examinations? Mr, McCombs: The Pita rnineentival Society. I hope the Government will sec to it that Slate students are allowed Io compete on equal terms. Reference to the charges of chemists fur making up prescriptions was made by Mr. McCombs. He niciilioiied lhe case of a prescription containing sixjienny worth of aspirin and ninepenee worth of hydrogen peroxide, for which it chom’st wanted to charge 7/6.

Mr. 11. S. S. Kyle (Opposition, Riccarton i : He must have known who you

"1 have no doubt veterinary charges are similarly disproportionate,” retorted Mr. McCombs, whose reference lo Mr. Kyle's profession of a veterinary surgeon was appreciated by the House. "The average chemicals in a prescription do not cost more than sixpence. including the bottle and the label. 'l'iie charges to the public should be brought down.” National Service Not Favoured. Mr. S. G. Holland (Opposition, Christchurch North) said that one result of the inquiry was that the chemists now knew more about running a pharmacy store than they ever did before. If the inquiry did nothing more than I" bring about increased efficiency in the pharmacy business it had not been in vain. He was satisfied that as a result of the investigation chem-

Ists would be able to offer an improved service at a lower cost and with more profit to themselves. Mr. Holland dissociated himself from tlie recommendation of the committee favouring the establishment, of a national pharmacy service. He did not think the time had arrived for that. Formidable Competition.

Tlie opinion that it would not be possible for the private chemists of the Dominion to hold their own and remain in competition with a firm, possessing lite advantages of Boots Limited was expressed by the Minister of Industries and Commerce, Hon. D. G. Sullivan. Mr. Sullivan paid a tribute to tlie work of the committee, it had to lie admitted, he said, that the firm of Boots J limited was a very good firm, paying good wages to its employees and giving them decent conditions, and with a reputation for good service to lite community. In Great Britain, where the firm had purchased a large number of retail establishments, it had treated tlie sellers well, it was also true that the firm had co-operated with the Imperial Government, and had fallen In with plans for social advancement by granting the 40-hour week “A number of people have written to me urging that Boots Limited .be allowed to extend their service." Mr. Sullivan said. "Against those representations we have had not only the petitions. but letters from individual chemists themselves, from their wives and families, and from their assistants, till over the country, praying that the business of the local retail chemists should be protected and that the Government should not permit the extension of Boots Limited. I think that the evidence will show that the chemists and their families would have every reason to be very much concerned at the possibility of the extension of the firm."

There was a great deal of unemployment among chemists in New Zealand to-day, Mr. Sullivan added. He was sure that if a firm with the advantages of Boots Limited went into direct competition with the petty form of business in pharmacy in the Dominion it was inevitable that the price which would have to be paid for the extension of that, firm would be an increase in unemployment among the private chemists. It would mean the displacement of the chemists and their assistants, the displacement of capital and general disruption in the trade. In fact, the Minister asserted, Hie effect of such a policy would be tantamount to an earthquake, so great would be the disorder. On one side there was this good and efficient (inn; on the other, the duty of the country to its own chemists to see that they received a fair opportunity to live and maintain their profession. Chemists to Set Their House in Order. “I think that, the committee lias chosen the best course,” Mr. Sullivan said, “in denying for tlie present to this firm the right to extend its operations and in calling on our own chemists to put their house in order by organising their business so that they can give a better and cheaper service, comparable to some extent to the one being received front Boots Limited. They will be given the opportunity to organise and secure the advantages of mass buying and mass business In the way that firm lias done, it will be up to tlie private chemists to take note of the recommendations of the committee and of what is said in this House now, so that they will be in a position in six months to come to us ami say that they have reorganised and are in a position to give a service to tlie country comparable with that given by lite.other organisation.”

Mr. Sullivan said that in taking the course decided on New Zealand would be putting herself in line with practically every other section of the British Empire. Nearly every other British country had refused to permit company pharmacy. In the course which would be taken if the report of the committee was approved. New Zealand, in fact, would be adopting a somewhat more generous attitude to the firm of Boots Limited than had been taken by the rest of the Empire.

"There is probably a good deal ol room for improvement in the business methods of the New Zealand wholesale houses and in the business of our own private chemists,” Mr. Sullivan said. "It was strenuously denied by the chemists or their witnesses that there had been any overcharging in New Zealand. But they faileel to produce itemised costs which would have enabled a dear view to be obtained of the position. The opinion is fairly widespread that chemists do charge too high prices. They have the opportunity now to see what they can do to remedy the position.” Protecting Local People. Mr. R. A. AVright (Independent, Wellington Suburbs) said that while it seemed hard to prevent capital coming into Hie country to establish new industries, it was only just to protect the local people against wealthy combines capable of mass production. However, the proposal to license chemists did not appeal to him. If it meant the squeezing out of established businesses, who was going to compensate them? “In my opinion,” said Mr. AVright, "this is just an ingenious device to introduce another form of Socialism. It is another tap on the wedge. If it is right: to license chemists then it 1.equally just to license every other class of business.” Mr. McCombs: Hear. hear. Mr. Sullivan: The Government you supported was responsible for the licensing of theatres.

Mr. Wright said he felt the Minister had in, view the idea of holding the chemisis in the palm of his hand. There would be no appeal, although that was not stated in the report. The Government was on the road to State Socialism. Need of Some Regulation. The Prime Minister, KI. Hon. M. J. Savage, said he was sorry to see Mr. M'right so worried about licensing. There was licensing all around now. Hotels were licensed, carriers were licensed, and a thousand other licenses were issued every year. "After all. there is something here that needs regulating,” continued Mr. Savage. "I am one of those who believe thill as far as it is humanly possible we ought lo train our own people in the professions and industries of the country. At the same time 1 don't think we want to build a ring round ourselves. It is only st question of applying common sense to the whole busi ne'ss. We don't want to be telling people outside New Zealand that we ar e Robinson Crusoe-like and that we don't want anybody to come here. There is nothing like that in our philosophy. but we do think that after all we have a responsibility to our own people. It is n matter of proper regulation and of shaping our course, “I don't think we need worry about the horrors of socialism or anything like that,” said Mr. Savage, "because, thank heaven, things happen while we tire sleeping. Whatever ‘isms’ are in •store for us they will come all right. All we have to do is lo legislate ~o that our legislation will be something in the nature of a true reflection >f conditions as we find them in Hie country. . . . We are travelling more rapidly these days than we did when we were lads. We are even travelling faster

than when the member for AVelliugtcn Suburbs belonged to the Socialist Party.” (Laughter.) Mr. F. AV. Schramm (Government, Auckland East) : He is a backslider.| The Prime Minister: AVe have no intention of socialising the pharmacy business in New Zealand. We want to protect the chemists, and at the same time we want to protect the . people, not necessarily against them, but to lend whatever assistance we can in having the business organised and put on a proper l ast’s. I repeat it is just a matter of shaping,our course with cool heads.

The Leader of the Opposition. Rt. Hou. G. AV. Forbes, said that Boots had promised not to extend their business beyond Auckland and AA r ellington until Parliament had an opportunity of investigating the whole question. Some of the suggestions in the committee's report were very valuable, but he would not like to see too much restriction or any action which would reduce the already small number of chemists in country districts. Mr. A. S. Richards (Government, Roskill) said there was nothing new in the regulation of cut-throat competition. It. was the practice of all business all over the world to turn to Hie Government' for regulation when chaos ruled, in the business concerned. The committee had done excellent work and had established a basis for the building up of a far better chemists’ service in the future.

.Mr. Kyle said Australia had had enough of State interference in business of the kind suggested by the committee if the chemists did not put their house in order in six mouths. The firm of Boots would not go into ii town unless it had a population of at least 10.600. "The chemists of this Dominion are giving the service,” said Mr. Kyle, “and they will lie very disappointed when they read the findings of the committee.'”

The opinion that: the Pharmuc'eutiial Society would be well pleased will) he report" of the committee was expressed by Mr. W. T. Anderton (Government, Eden). The adoption of the committee's recommendations would give tl.e chemists protection, buh not a license to do as they desired, as had been tbe case in the past. Satisfaction with Hie report was expressed by Mr. 11. Atmore (Independent, Nelson). The Government, lie said, had at least, issued a stay order against the invasion of Boots in New Zealand. Mr. C. L. Hunter (Government, Manawatu), a member of the committee, said Hie most important recommendation in the report was that relating to a national pharmacy service, it was hoped to have a national health scheme in New Zealand, and u pharmacy service would be necessary as part of such a scheme. The report gave to the chemists a greater measure of protection khan they had ever enjoyed before. “The report,” added Mr. Hunter, “is definitely in the interests of the private chemist and the public.” Replying to Hie debate. Mr. Jordan said the point raised by Mr. McCombs concerning rhe welfare of students did not come within the scope of the committee. The evidence given at the inquiry showed the need for the chemists’ business to be put in order. The report was adopted.