Hi
mwazowski
Thanks for your post - I am wondering if your pharmacy is located in more of an outer suburb compared to other pharmacies where they are in a major shopping district, thus experiencing better sales?
The reason is that most bigger or higher foot traffic would have both coles and woolies in one area. If there is an area where its just enough for one of the majors, then the foot traffic would not be that great.
I doubt Coles would be selling at a loss given even though their selling price is lower than your buying price. It is more likely that they are getting a much bigger volume discount where as your volume discount is probably a bit limited. This is most likely reason why you may not have the same restrictions because your account is probably one of the more profitable margin but with less impact on their supply...
Woolies came into the market later because most of BAL products were sold through the likes of Coles first... hence their pricing isn't as good. But given the recent pallet size available at Woolies that we've all seen, they must have committed to similar volume but sell at same price. They may drop the price and do a special if they can't push the stock .
April was an outlier event because of a tax change.
@aneeso - this is probably why some tmall stats are showing a 50% drop because of the confusion of what is in the "Positive" list. There would have been a bumper jump in stock ordering before the china tax came in. This event would have resolved itself by now (given one month has passed already).
We also know that the Big Boss China Pharmacy are descending down to Australia next month, along with their shopping list., along with some Chinese government officials. If they can smooth the trade and ensure products on the positive list are imported, it will be good. I believed the Chinese government didn't handle the tax situation well in April and left the "doing" to the customs protection without proper guidance. (hence the drop in SP and the confusion and the bottleneck). But again.. this is would have been resolved else there would have been an outcry and thus causing all player's share price to drop like a brick. There are too many players in the end-to-end supply chain from manufacturer to consumer not to notice this.....
In terms of BAL's RRP pricing, it is simply their stated recommended price but no one ever really follows that due to competition between stores; (from coles to woolies to pharmacies). Not only that, if the stock is displayed in the stores, it means that its already sold to the stores and counted as "accounts receivable" in BAL's account until you pay up depending on your terms with BAL. (eg: You may have a 30 day terms compared to Coles which may be a 60 days term).
In terms of 1st June - I suspect this is a step change on stopping the grey market whereby even products like Karicare which are no longer distributed officially in China, could still be imported via the Grey market. A current affairs yesterday showed that some big Daigous can make $300,000 profit per month doing this kind of business. This makes a mockery of the "positive list" because they simply ignore what can be imported as long as there's a profit to be made. Daigous will have a harder time importing items that are not on the "positive list" going forward.
Again - see my earlier paragraph about the big boss pharmacy with their Chinese government officials along for the ride. They want to make sure that goods imported through the pharmacy channels are in line with the positive list. This is why I say that they already have a shopping list ("positive list") and thus simply needing to confirm the price, volume and delivery time with manufacturers and sign those contracts. They want to reduce the Grey market and replace it with official trade channels like this pharmacy trade channel that's coming up towards end of June (and transfer some of the big profits from the Daigou trade to Government's coffers)
Like any investments - please do own research!! - if anyone hears more about the 1st June - please share it... I want to check if my suspicion is correct or not...
Thank you.
