The Pharmaceutical Board of T&T and other businesses are concerned about the possible effects of the Agostini’s Group’s acquisition of certain distribution companies – including a ripple effect on prices for customers and on other businesses.
But T&T’s Fair Trading Commission intends to continue monitoring the situation post-acquisition.
“Approval isn’t the end of the process,” said TTFTC executive director Bevan Narinesingh yesterday.
“TTFTC’s entitled to conduct further investigations to determine whether any enterprise is engaged in business activities which contravene the Fair Trading Act.”
Since last weekend, comments have flowed after it was reported that Agostini’s Ltd’s subsidiary Smith Robertson – T&T’s largest wholesale distributor of pharmaceutical and personal care products – had acquired 100 per cent of leading pharmaceutical and medical supplies distributor Oscar Francois. That company also distributes agricultural, veterinary and personal care products. Also acquired is an associate company, Intersol Ltd.
Agostini’s is a publicly listed company that is majority-owned by the Mouttet family. The acquisition expands Agostini’s large pharmaceutical industry holdings. Agostini’s stated that the arrangement was approved by TTFTC and the deal is expected to close by April 30. Both Smith Robertson and Super-Pharm (T&T’s largest pharmacy chain) are wholly-owned by Agostini’s. The development has arisen when the group “anticipates” a role in COVID-19 vaccines.
Yesterday, however, Pharmaceutical Board of T&T president Andrew Rahaman admitted to concern over the move.
“I’m wary of the freedom they have to increase their price. We’ve had complaints when Panadol went up and I flagged that issue. While pharmacies have fixed mark-up, the wholesaler is free to mark-up ‘how ever’,” Rahaman said.
“If their prices increase and our fixed mark-up is added to it, it will mean increases for customers. Business is very, very slow because of the economy, people purchase minimum, places are closing. This situation could affect pharmacies, supplies and consumer prices.”
He was concerned since the group is linked with the largest retail pharmacy chain and several other companies.
“I intend calling TTFTC to list the possible deleterious effects of the situation to industry and public. They need to protect consumers,” he said.
Pharmacy owner Valini Ramnarine, of Valini’s in San Fernando, agreed there was concern over the acquisition.
“There are concerns, especially regarding supplies and prices for customers. Prices increased four times in the last year. It’s also unethical and unfair a group can be a wholesaler and have links with a large retailer altogether,” Ramnarine said.
“We’ve seen where some doctors have given prescriptions to people addressed directly to a distribution company. So there’s concern for business existence. We hope the Pharmacy Board can protect us. Business has been the worst in decades.”
Gerald Aboud, CEO of the Starlite Group, who listed different brands carried by Smith Robertson and Oscar Francois, added, “Many of these lines competing against each other will now only be carried by one distributor who also controls retail sales channels. This can result in higher prices for consumers and additional pressure on retailers, as well as even other distributors. “
A Central pharmacy noted recent instances where a particular drug was out of stock but a large entity had it.
Sangre Grande pharmacy owners added, “Our concern is whether this may squeeze both businesses and customers down the line. At one point, we couldn’t get Vitamin C for patients – but another supplier had.”
Calls and text messages to Agostini chairman Christian Mouttet’s cell phone went unanswered yesterday.
But TTFTC’s Narinesingh stood by the process.
“This matter took four months to examine and approve. In all proposed merger transactions which meet relevant statutory thresholds and require TTFTC’s prior approval, the commission has to be satisfied the transaction wouldn’t affect competition or be detrimental to the consumer/economy before it can be approved.
“The commission requires comprehensive information to be disclosed by parties. TTFTC also conducts its own investigations, including but not limited to receiving information from market participants and conducted market analysis, to determine whether the transaction is likely to affect competition or be detrimental to the consumer/economy.”
However, dialogue with stakeholders wouldn’t have identified the applicant due to TTFTC’s confidentiality framework.
“Research showed no sole distributions but co-distributionships. Panadol, for instance, is distributed by Smith Robertson and Shine Distributions.”
Narinesingh said monopoly isn’t in itself a violation of the Fair Trading Act. He said the TTFTC continues being vigilant for anti-competitive activities.
“If anyone’s aware of anti-competitive behaviour/practices, they’re urged to make a complaint to the commission,” Narinesingh added.
* Tied selling and bundling of discounts (if it constitutes abuse of monopoly power)
* Unfair selling prices/predatory pricing/discriminatory behaviour
* Abusive increase of prices compared with increase of costs
* Engaging in exclusive dealing/market restriction or seeking to merger/acquire new entrants/nascent pharmaceutical distributors in the local market
* Fixing/restricting products’ resale price.
* Engaging in collusion to prevent commercialisation or supply of affordable generic substitutes
* Discontinuing a product brand(s) presently offered that may cause market disruption or be to customers’ detriment.
* Constructing barriers to supply/distribution of goods.
“If anyone’s aware of anti-competitive behaviour/practices, they ‘re urged to make a complaint to the commission,” Narinesingh added.
Regional chambers concerned
Co-ordinator of the Confederation of Regional Business Chambers Jai Leladharsingh admits they are also looking at the recent Agostini’s acquisition.
”The confederation is pleased to observe confidence in the economy is being demonstrated through investments, such as Agostini’s. The confederation is hopeful this newly-formed entity will be in a position to enhance and improve reliability of supplies.
“However, concerns are being expressed that this occurrence won’t negatively impact the cost of citizens’ health care, especially within the pandemic. The confederation urges this group to continue to demonstrate the high level of trade practices, as this would enable citizens, and to continually access their products at an economical cost.”
UNC’s Rushton Paray (Trade) said he’s checking pharmacies to assess potential impact. Former UNC MP Dr Fuad Khan – in a family of pharmacists – saw nothing wrong with Agostini’s move but said the Health Ministry must level the playing field to allow pharmacies to import generic drugs, especially to cater to those who can’t afford bigger priced items.