PHARMACIES in the Republic are having to fight harder than ever and pay over the odds to Secure prime property positions for their businesses. Recent legislation, limiting the number of pharmacies which can dispense drugs, is driving the demand.
Already this year, a number of chemists have paid a premium to get into commercial developments such as Blanchardstown Town Centre. The entry of British and Northern Ireland-based pharmacy chains such as Boots and Connors, which intend to aggressively expand their outlets, will add to the competition for good locations.
In some cases, groups of three or four chemists are coming together to buy good locations, to secure their pitches, says Eoin Feeney, of Palmer McCormack, whose agency was involved in three lettings to chemists at Blanchardstown.
He says chemists who cannot afford a property on their own are joining forces to buy particular sites, because they realise good locations are limited.
Regulations in force since May limit the number of General Medical Scheme (GMS) dispensing pharmacies and are creating keen competition for new outlets. Irish pharmacy owners hope that these regulations, with their emphasis on professionalism and a community base, will safeguard their traditional position within the GMS scheme. A GMS dispensing licence, depending on the location, can be vital to a chemist's business.
Boots opened in a 25,000-square-foot unit in the new Jervis Street centre last week. The outlet will be dispensing prescriptions as part of the GMS. Boots has also agreed to take a 5,000-square-foot unit in The Square, Tallaght, but will not dispense medical drugs there. This is because of an existing exclusivity-to-dispense agreement between Hayes Conyngham Robinson (HCR) and the landlords of The Square.
Boots intends to expand its business in Ireland. Fintan Tierney, of Lambert Smith Hampton, agents for the company, says it is actively pursuing other outlets, including locations outside Dublin.
Connors, which has 49 outlets in the North, is already operating from a 4,000-square-foot unit in Tallaght and is taking 5,000 square feet in Blanchardstown's £100 million development.
Because of the HCR exclusivity right, Connors does not dispense in Tallaght but Fergus Cross, of agents College Property, says the Connors outlet in Blanchardstown will be a "dispensing chemist". Connors is also planning to expand its business in the Republic. Mr Cross says the company's "main thrust" will be to operate as full chemists, dispensing medical drugs.
"If this isn't possible, however, and if they feel they can trade successfully in other goods, then they'll go ahead and do that too," he says.
Connors also operates a number of outlets called Options, dealing mostly in toiletries and cosmetics. Although Boots and Connors deal extensively in a range of goods outside the strictly pharmaceutical area, Irish chemists are worried about a price war.
Ownership of a GMS dispensing licence was described by one pharmacist as "vital because of the sheer number of customers it brings into the shop".
The new regulations, drawn up between The Irish Pharmaceutical Union and the Department of Health, are in line with an EU directive and designed to curb the growing number of pharmacies. GMS dispensing licences will be restricted to chemists which are community based.
Chemists will be required to serve urban catchment areas of at least 4,000 people (the rural figure is 2,500) and be spaced at least 250 metres apart (or 5 kilometres in the country). Over one-third of the population, or 1.2 million people qualify under the scheme, so having a dispensing licence can be a considerable advantage,
A fee of approximately £1.60 is payable for each prescription dispensed and between £4.00 and £9.00 for urgent or late dispensing.
One, at least, of the Republic's pharmacy chain owners was sanguine, though reluctant to be named. "I'm not losing any sleep over it," he said. "The Irish chemist is community-based and GMS licences will go to those who dive priority to customer and healthcare. Certainly, there will be new outlets coming up in shopping centres. But I'm confident that when applications for licences are considered by the health boards, priority will be given to the professionally staffed, community-based pharmacy.
"We're customer driven, not by profit margins - as is the case in England. Boots will make an impact but I don't think they'll wipe out the small operators in they way they did in the UK," he said.
