Approval for Chemist Warehouse and Sigma merger

The competition watchdog has approved the $8.8 billion merger of pharmacy businesses Chemist Warehouse and Sigma Health, after deciding it won't hamper consumer choice.

Chemist Warehouse, a pharmacy franchisor, is now free to combine forces with pharmaceutical wholesaler Sigma Healthcare, after the Australian Competition and Consumer Commission verdict.

Sigma is also a franchisor of pharmacies under banners such as Amcal+ and Discount Drug Store.

"The ACCC's analysis found that the proposed merger is unlikely to substantially lessen competition nationally or locally because other pharmacies and non-pharmacy retailers will continue to compete to the same extent they compete now,” chair Gina Cass-Gottlieb said.

Consumers valued different aspects of the two firm's banner brands, she added.

"Importantly, consumers will continue to have choice between smaller format stores offering personalised services to consumers and the Chemist Warehouse offering, focused on larger format discount stores and front-of-store offerings," she said.

Also under consideration was the impact of the proposed merger on the supply of pharmacy retail products, including generic medicines.

The ACCC concluded there were multiple channels available to suppliers and manufacturers of these products to reach consumers.

The merger had been opposed by the Pharmacy Guild, an industry lobby group, on competition grounds.