Blackmores cashes in on Pan collapse
surge after an investigation into quality control last year removed
competitor Pan Pharmaceutical's products from the market.
Australian medicines regulator the Therapeutic Goods Administration issued a recall of thousands of Pan's products in April last year after finding faulty manufacturing standards at the company's facilities.
Blackmores has clearly benefited from the collapse of the country's biggest contract manufacturer of natural medicines, reporting a 32 per cent increase in revenue for this year's first half. But the company warned yesterday that this growth is likely to dampen somewhat in the next six months as consumers find Pan products back on the shelves.
It could also be hit by the launch of consumer health business Mayne's Nature's Own brand into the grocery channel, it said.
Chairman Marcus Blackmore said the firm is focused on "retaining as much of our post-Pan market share gains as we possibly can, recognising the strong and sustainable platform this strategy will deliver for future years".
He added that the Pan crisis "has been the catalyst for a consumer driven flight to quality and trust, which have been and remains integral core values of Blackmores. This has obviously served us well over the past nine months and will remain the foundation of our future".
Facing a more competitive environment, Blackmores has deferred some sales and marketing activity from the first half of the year to a more concentrated campaign in the second half, it said, and will spend at least A$3 million more on brand support during the next six months.
This will eat into profits, which are unlikely to match those of the first half - $6.3 million compared to $1.4 million for the previous year's comparable period.
The firm also saw record sales and profitability in its two biggest Asian operations, Malaysia and Thailand, although was hit by the strength of the Australian dollar.
