Australian Pharmaceutical Industries

History

Australian Pharmaceutical Industries was incorporated as Chemists' Co-operative of New South Wales Limited in 1910 and later became known as Wholesale Drug Co before adopting its current name, Australian Pharmaceutical Industries, in 1971.

API acquired Newmans & Western Pharmaceuticals in 1996, and in the following year Amed Supplies Australia was acquired to increase its coverage in medical and surgical products for the hospital market.

API was listed on the Australian Stock Exchange on 16 June 1997.

Chemworld Chemist, a new retail pharmacy banner group, was launched in 1998. API acquired the pharmaceutical wholesaling and manufacturing operations of Washington H. Soul Pattinson in 2000.

On 29 October 2001, API purchased Hospital Supplies of Australia, the hospital and medical wholesale distribution business previously owned by the Victorian Healthcare Association. This enabled API to extend its distribution business to the public and private hospital market.

On 1 October 2002, API acquired the Interpacific and Interpharma businesses in New Zealand. These companies operated pharmacy wholesaling and retailing to New Zealand, the manufacture of over the counter pharmaceuticals, and wholesale distribution of dental products. This acquisition included Zuellig Pharma Limited, PSM Healthcare Limited and Halas Dental Limited.

The retail brands of Priceline, Priceline Pharmacy, House and Price Attack were acquired on 6 October 2004 from the New Price Retail business. This propelled API to restructure its operations to focus primarily on growing its pharmaceutical distribution, retailing and manufacturing business. The retail led strategy was established by Jeff Sher, the architect of the Priceline Pharmacy model.

The next year API continued to narrow its focus to the pharmacy channel and sold the Halas Dental business.

In 2005, API formed a joint venture with ABN AMRO Capital Advisory Australia Pty Ltd. Later that year, the newly formed joint venture then acquired Clifford Hallam Pharmaceuticals Pty Limited.

API sold its New Zealand healthcare and logistics pharmacy business on 14 December 2005.

In 2007, API divested its House and Price Attack brands as part of its retail strategy to focus on Priceline.

Senior management

The directors of API are as follows:

Accounting discrepancies

In 2006 after the implementation of a new IT system, the company found $17.2 million of the company's declared profit had disappeared. Forensic Accountants called in could not find any trace of the money. API chose to write the full amount off their annual profit, causing a net loss of $17.2 million. The company's CEO Jeff Sher resigned after a strategic difference with the board in relation to the treatment of the accounting discrepancy which was proven to have historical significance predating the API acquisition of Priceline.

WorkChoices

The Priceline division shed 32 workers for "operational reasons" under the new WorkChoices Legislation. One of these workers, Andrew Cruickshank, a store layout planner, alleged Priceline fired him on his $101,000 a year contract, replacing him with someone on a $75 000 contract. Priceline claimed otherwise, "It was not the same role...the person wouldn't have been capable of doing the same things". The AIRC ruled in favour of Priceline and found that Cruickshank's termination resulted from Priceline's financial difficulties and the subsequent decision to reorganise its structure.

Sigma takeover

Rival company Sigma Pharmaceuticals had attempted to take over API in 2002, but had been blocked by the ACCC. Sigma made another bid in 2006, and discussions continued until 11 December 2006, when Sigma withdrew its bid.