ARGENTINE PHARMACY LAW HERALDS RETAIL INDUSTRY SHAKEUP

Local industry groups have protested a new law regulating Argentina's pharmacy sector. Under the proposal, which has already been approved in the lower house of Argentina's Congress, large store chains could be hit hard and forced to change their ownership structures. There are also fears that the measure could encourage, rather than guard against, monopolistic practices in the pharmacy sector.

The law states that no single owner may operate more than three pharmacies, while stores will be obliged to change their legal identity to a structure similar to a limited liability company (in Argentina, this is known as an SRL, rather than the more common corporate identity known in Spanish as SA). Legal liability would thus be attributable to a named individual rather than a corporation.

The measure also imposes drastic limits on the proximity of outlets to one another, with the restriction placed at 300 metres. The issue has effectively divided the drug retail industry, with some kiosk owners now to be banned from selling drugs of any kind, while pharmacies will be barred from selling non-medicinal products.

Some sources have also noted that a similar law introduced in the province of Buenos Aires led to average price rises of between 5% and 10%. The regulation has reportedly left some neighbourhoods in the hands of a localised monopoly, with no 24-hour service and allegedly unfair retail pricing structures.