Woolies could face political, regulatory hurdles in $870m Priceline bid

Mr Cousins also flagged Woolworths’ 14.9 per cent stake in gaming and liquor business Endeavour as a potential point of contention for the Guild. Bell Potter analyst John Hester also noted the Guild was a “fierce defender of the rules”.

Market watchers also flagged potential issues for Woolworths in regard to competition concerns, considering the supermarket is already a major player in the healthcare and beauty sector, whereas Bunnings and Officeworks owner Wesfarmers is not.

“Given [Woolworths’ successful acquisition of foodservices business PFD], ACCC approval arguably can be achieved for Woolworths, yet it will take time and there is greater ACCC risk for Woolworths than Wesfarmers,” Mr Cousins said.

JP Morgan analyst Bryan Raymond also said the ACCC “could weigh in”, but acknowledged that competition in the pharmacy sector would likely remain healthy with the presence of rivals such as Chemist Warehouse and Sigma.

The ACCC has so far said it is aware of the proposed takeover and is awaiting a submission from Woolworths. A spokesperson for the Guild said it had nothing further to add to at this point.

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Outgoing Health Minister Greg Hunt told reporters on Friday he didn’t have any details on the Woolworths proposal, but reinforced the government’s belief in the community pharmacy model.

“I do believe very strongly in community pharmacy, we put together an $18.3 billion seventh community pharmacy agreement. It was worked through with the Pharmacy Guild and the Pharmaceutical Society of Australia,” he said.

“On the commercial matters, I don’t have details, I apologise, that will be one for the company and the regulators.”

Meanwhile, Labor’s health spokesman Mark Butler said the opposition was looking forward to the competition regulator’s assessment of the deal.

“Australians rely on their local community pharmacies for convenient, efficient and reliable advice. If the purchase is approved, we expect Priceline to continue to follow all the relevant rules around pharmacy including location rules,” he said.

A spokesperson for the Pharmaceutical Society of Australia said the organisation was seeking further information on the bid and would “continue to monitor the potential effects of any significant change in the industry”.

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