by Mike Mozart (CC BY 2.0)

Mexican beverage and retail company FEMSA has acquired Corporación GPF, a pharmacy operator based in Quito that has more than 620 distribution points in Ecuador and owns the Fybeca and SanaSana brands. The transaction will be consolidated through Socofar, a Chilean pharmaceutical that FEMSA acquired in 2015.

The acquisition is the latest foray into the retail health segment for the multinational giant dating back to 2012, when FEMSA agreed to acquire a 75 percent interest in Farmacias Yza and its more than 333 stores (at that time) in Mexico’s southeast region. A year later FEMSA announced the purchase of Farmacias FM Moderna, a leading operator in Sinaloa, and in 2015, it acquired Farmacon with a presence in the states of Sinaloa, Sonora, Baja California and Baja California Sur.

“The recent acquisition is part of FEMSA Comercio’s strategy to establish itself as a relevant competitor in this attractive retail segment,” said FEMSA in an official press release. FEMSA is active in the beverage industry with products like Coca-Cola and has retail experience through its Oxxo convenience stores.

The food and medicines industries may appear to be worlds apart but from a business point of view, they are linked by multisectoral factors such as logistics, regulation and commercialization. One shared characteristic is that cold chains are necessary for both segments. “Businesses in the pharmaceutical, medical and food industries are increasingly relying on the cold chain and logistics companies understand there is a science behind it since it requires the understanding of the chemical and biological processes linked with perishability,” according to the Geography of Transports Systems.

Another advantage of merging expertise from both industries is that convenience stores can facilitate coverage and better access to medicines for the population, especially OTC drugs. COFEPRIS, the country’s highest authority for sanitary regulation, states in its magazine that “the sale of OTC drugs can help improve the availability of medicines to limit the exceeding of non-consumed  units that can have an impact the health of individuals and the environment.”

OTC medications represent an economic saving for public health institutions by allowing them to focus their attention and resources on more complex conditions rather than common illnesses that can be addressed with an OTC. “In a year, more than 15 million Mexicans visit a doctor for common illnesses like colds or diarrhea and this costs the public health sector approximately MX$48.5 billion between laboratory studies and consultation time,” said the Association of Manufacturers of Free Access Medicines (AFAMELA) in an interview with Mexico Health Review 2018.

The savings resulting from the growth and commercial development of the OTC market can later be allocated to urgent areas of the public health. Benni Boruchowski, president of AFAMELA, said in the same interview that savings for the public sector would be up to 11.8 percent of its budget, which would allow the channeling of these resources to attend chronic diseases, such as diabetes and cancer.

Besides improving access to medications, combining the two segments also bolsters retail growth in both areas. “The sale of OTC drugs has been an important driver for pharmacies or specialized stores such as Oxxo, Seven and Circulo K,” according to Euromonitor. “These types of establishments had a 58.7 percent growth between 2012-2017 in Mexico, reaching a value of MX$4.13 billion and it is expected to keep growing.”

 

 

Alessa Flores

by Alessa Flores

Industry Analyst and Journalist at Mexico Business Publishing

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