Retail Chemists Plan Alliance

The Times of India, July 26, 2006.

Mumbai : Your next door chemist shop is going in through a lot of changes. Don't be surprised if he offers you drugs at cheaper prices or enrolls you on a customer loyalty program. On his part, he may no longer be a standalone retailer, but part of a big corporate entry in your state.

To tackle the threat from the organized retail players setting up shop in the country, the All India Organization of Chemists & Druggists (AIOCD) is forming a privately held company that will transform the next-door druggist into the franchisee of an international pharmacy chain.

It works out like this. AIOCD will start a pan India Company called AIOCD Ltd. It will be a holding company handling the logistics and distribution. Further, every state will have subsidiary of AIOCD. Shares of face value Rs 10 will be issued to existing members (Chemists and traders) based on their turnover. The new company will procure and supply medicines to the shareholders, taking care of their logistics. As orders will be combined, the size of order will give them power to bargain with pharmaceutical firms.

All the subsidiaries and the holding company will have a professional staff starting with a CEO. "Only the board of directors will comprise members from the association," said J S Shinde, general secretary, AIOCD.

"We have roped in consultants for various functions such as connecting these stores through the Internet, CAs for financial structuring, HR, consultants for organizational structure and banks for finance," Shinde said. TOI has also learnt that a leading bank approached AIOCD to lend them loans to the tune of Rs 2000 corer. Shinde refused to comment on it.

So how does it benefit you? The members of the association need to follow certain norms. These includes maintaining temperature of medicines at a prescribed level, having certain portion of a drug store in air-conditioned environment and maintaining a minimum level of hygiene.