Profitable Alliance Boots remodels service to meet manufacturers needs
Alliance Boots announced a 20% rise in annual profit in 2007, its first year as a private company, as trading profit rose to
Alliance Boots announced a 20% rise in annual profit in 2007, its first year as a private company, as trading profit rose to £771m. However, it is having to adapt its business strategy to the rapidly changing pharmaceutical supply trends.
The company plans to relocate the headquarters of the group to Switzerland, as it believes this "enhances the position of Alliance Boots as a leading international pharmacy-led health and beauty group alongside a number of the world's leading pharmaceutical manufacturers."
Executive chairman Stefano Pessina said a key trend is an increase in the number of branded ethical pharmaceutical manufacturers switching from selling via pharmaceutical wholesalers to selling direct to pharmacies using relatively few third party distributors to deliver the product, invoice customers and collect payments.
He added: "We are responding innovatively to a changing business environment in which some major pharmaceutical manufacturers are looking to bypass traditional wholesalers and do business directly with pharmacists. By adjusting our business model, we have turned this development into an opportunity by providing a new contract delivery service tailored to manufacturers" needs. For Alliance Healthcare, an added benefit of this new service offering is that manufacturers retain ownership of the product, freeing up working capital that we can reinvest in other areas of the business.
"Our scale and efficiency have made us the distribution partner of choice for manufacturers seeking to outsource elements of their supply chain or to operate a direct to pharmacy distribution service, while our quality of service and range of value added services allow us to remain a leader in pharmaceutical wholesaling in the markets in which we operate," he said.
Alliance Boots was created on 31 July 2006 through the merger of Alliance UniChem Plc and Boots Group PLC. Alliance Boots was subsequently acquired by AB Acquisitions Limited on 26 June 2007.