Ann: CEO Address to Shareholders, page-2

Can anyone explain what this complaint is about in normal language?

Firstly, and critically, is the issue of exclusive direct distribution. Essentially, certain manufacturers have
cherry picked the most profitable products for exclusive distribution direct to pharmacy, leaving the
unprofitable products to CSO wholesalers to deliver, which we are obliged to do. In a cross subsidized
system such as this, allowing the more profitable products to be selectively removed from the system
cannot be sustained. Pharmacy can only access these products from one distributor so there is no
competition, and having only one distributor introduces a single point of failure in the event of out of
stock or other issues with a distributor. This is the reverse of normal disruption – it is the equivalent of
telling consumers you can only use Telstra for your mobile phone service.