Street talk confirms CW tendering out wholesale business, page-22

Yes DHL would love to grow their pharmacy distribution business but would need to become a full line wholesaler to take on all the CW business as an exclusive distributor. Dealing direct with all of CW 300 plus stores handling individual pharmacy orders would be logistically very difficult ex the manufacturer and would be incredibly unpopular at the store level unless CW set up their own re-distribution centres.

The current distribution system has evolved for good logistical reason. The beauty of dealing with the full line wholesaler means the majority of daily or bulk orders come in on a regular schedule, single packing slip & invoice for ease of unpacking and restocking shelves. Dispensary/Back Office ordering and inventory management are geared around not having to hold a lot of bulk stock apart from strong selling seasonal products.

If DHL became a full line CSO wholesaler good luck to them. As much as I would hate to see a huge international logistics company taking market share away from Australian companies like Sigma and API, they have the might to do so.

If DHL did decide to become a full line wholesaler on the back of getting the CW business then this would certainly be the trigger for Sigma and API to talk merger again to form a very strong and profitable business. In some ways the merger would probably be a lot simpler now than in 2002. With DHL in the market the ACCC could have no objections.