Religare Wellness Limited (RWL), part of Religare Enterprises, may soon have meeting with the representatives of the Pharmaceutical Wholesalers Association (PWA) to resolve the issues regarding obtaining medicines for Religare's retail chain.
Last month Religare was granted license to set up retail outlets in the city. However in spite of getting the license the company is reportedly having trouble obtaining the medicines from the existing wholesalers.
According to a source from the association, the company is having difficulty in getting medicines from the wholesalers in spite of the license to start four retail stores in Mumbai between Bandra to Borivali. He informed that the members of the Association are concerned that as a corporate chain Religare will adopt the same business tactic that was used by Subhiksha and sell the products under cost.
“We want to ensure that the company would not resort to unfair prices that would affect the interests of the surrounding retailers. Our main aim is to protect the interest of these small retailers as they consider these corporate chains as a threat to them,” he said.
There has been a surge in organised retailing in India from the last few years leading to slow killing of small retailers as they find it difficult to handle the competitive pricing and below cost sales by organised retailers. There is general consensus among the retailers to have a mechanism to handle such issues, as there have been reports that small retailers in the vicinity of the organised retailer have suffered considerably due to the business tactic used by the companies.
According to the source dialogue is on with the concerned association so that they can get into a consensus in this matter as soon as possible.
However, according to a source from RWL, even though the company have been looking to launch operations in Mumbai city for a significant period of time, restrictive trade practices have delayed their launch since suppliers and distributors are being apprehensive about supplying medicines to them.
Sources state, that suppliers fear penal provisions from trade if they supply to any chain stores or their centralised warehouses. The company sources claim that the PWA, Mumbai’s nodal agency for pharmaceutical suppliers, has not been able to break the shackles of such restrictive practices despite these being a contravention of DPCO (para 18) which states that no manufacturer, distributor or dealer shall withhold or refuse the sale of drug without good and sufficient reason. It also appears clear that the writ of the CCI on curbing such restrictive trade practices does not hold force in Mumbai either.
Under the Religare Wellness initiative health stores will be set up all across India with an aim to cater to all the health needs of a family from prescription drugs, OTC drugs, diagnostic kits, fast moving health and consumer goods, pathology collection centre.