The Commerce Commission has granted clearance to CDC Pharmaceuticals Limited (CDC) and Pharmacy Wholesalers (Central) Limited (PWL Central) to merge their respective businesses.

Currently, CDC and PWL Central wholesale a range of prescription and over-the-counter pharmaceutical products to pharmacies as well as some hospitals.

“The Commission is satisfied that the proposed acquisition will not have, or would not be likely to have, the effect of substantially lessening competition in any market in New Zealand,” said Commerce Commission Chairman Dr Mark Berry.

CDC and PWL Central are co-operative companies owned by their customers. All existing shareholders would become shareholders in the merged entity. “In this instance, the Commission considers that the merged entity is unlikely to have an incentive to raise prices to its own shareholding customers,” said Dr Berry.

“In addition, CDC and PWL Central primarily operate in different parts of the country so there is limited direct overlap in their operations. In all the regions where the merged entity would operate, it would compete against existing suppliers, notably ProPharma,” Dr Berry added.

A public version of the written reasons for the decision will be available shortly on the Clearances Register.

Background

At present, CDC primarily wholesales pharmaceuticals in the South Island and in Wellington from its warehouses in Dunedin, Christchurch and Wellington.

PWL Central primarily wholesales pharmaceuticals in the central North Island from its warehouses in New Plymouth, Wanganui and Napier. Both CDC and PWL Central also have a presence in the Manawatu and Auckland regions.

ProPharma is one of the brands of Pharmacy Retailing (NZ) Limited, which is part of EBOS Group Limited. Pharmacy Retailing (NZ) Limited wholesales pharmaceutical products across the country from eight ProPharma warehouses. It also operates Pharmacy Wholesalers Russell, which is based in Auckland.