BEHIND THE HEADLINES: Boots gears up for post-RPM competition

As far as dominance of the over-the-counter pharmaceutical market

goes, the boot is switching to the other foot.

That was the unhappy message for Boots in last Sunday's Observer. The

paper warned that soon-to-be-released figures would show Tesco already

kicking the long-term leader off the top-spot in the wake of the

scrapping of the Retail Price Maintenance (RPM) agreement, which fixed

prices for many non-prescription drugs.

'If I were Boots, I'd be very afraid,' one analyst was quoted as


The claims spoiled what had been a good week for Boots in PR terms. When

below expectations annual results were announced the previous Thursday,

CEO Steve Russell had managed to boost the share price with an 'upbeat

message on strategy,' according to Reuters.

Boots announced plans for an upmarket 'Pure Beauty' concept store to

complement its 'wellbeing' services such as nail bars, reflexology

centres and the TV channel formed with Granada.

But as The Observer rolled off the presses, Russell was still spreading

the positive message in The Sunday Telegraph. And if the Observer

criticism meted out spread fear among the Boots PR team, they hid it


Francis Thomas, Boots head of financial media relations, said: 'We

haven't seen the research that the Observer story was based on - and the

figures only refer to one particular month.

'But because of the abolition of the RPM, we're into a new ball game as

far as the marketing of medicines is concerned. Early indications are

we're doing well by being able to promote on price and being able to use

three for two deals with medicines that were previously barred from

using such mechanisms,' he added.

Tesco was bullish about the possibilities offered by the scrapping of

the RPM. UK head of media relations David Sawday said: 'It's a great

story. As responsible pharmacists, we didn't feel it would be

appropriate to lobby for the abolition of the RPM. Now it's happened it

has allowed us to speak about our prices loudly.'

Former Boots communications director Ian Wright said it would be

premature to write his ex-employers off just yet. 'They've had nearly

six years to prepare for this day and they're bound to be ready. Boots

still has huge reserves of trust among customers and patients.'

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