Independent pharmacists who objected to Countdown running pharmacies and dispensing prescriptions are simply disgruntled commercial competitors, the high court in Wellington heard yesterday.

New Zealand Independent Community Pharmacy Group (ICPG) sought a review of decisions to grant pharmacy licences to two Countdown pharmacies ultimately owned by Woolworths Limited. The pharmacies are in the Lower Hutt suburb of Wainuiomata and in Gisborne. 

The Countdown Pharmacy in Gisborne is currently closed due to lack of staff, the court heard.

The ICPG is also seeking relief, which would entail the revocation of the Integrated Community Pharmacy Services Agreement (ICPSA) granted to the Countdown pharmacies. 

The group claims the Countdown pharmacies are not under full “effective control” of pharmacists as required by law, and the former district health boards (DHBs) had not properly considered Treaty of Waitangi requirements when approving the applications.

It took issue with Countdown's policy of discounting the $5 government prescription charge, which the group saw as a loss leader to drum up business. Neither the former Hutt Valley DHB nor Gisborne's former DHB, Hauora Tairāwhiti, had considered any possible negative outcomes from that policy, the ICPG claimed.

An innocent party

Countdown pharmacies' lawyer, Malcolm Crotty, said there was no statutory definition of effective control in the Medicines Act. He did not accept the ICPG's argument that the pharmacist shareholder had to have full 51% control so they could override the corporate shareholder. 

This put an unnecessary gloss on the act's requirements, he said.

GDL RX NO8 Limited had applied for a pharmacy agreement in good faith and was an innocent party to the dispute. "There are others who are not before the court who have licences granted on the same and similar bases," Crotty said.

"What motivated the applicants? It is clear the applicants are disgruntled competitors. There is ample evidence that the group is concerned about the effect of new pharmacies on their own businesses."


Documents filed by the two former DHBs stated that individual pharmacies in the Gisborne area had objected to new pharmacies being given agreements on grounds that were anti-competitive. In 2018, ICPG members had opposed applications from an online pharmacy and a local Māori pharmacist.

"The ICPG's attempt to present itself as a benevolent advocate for high-quality pharmacy services, acting only in the interests of customers without any self-interest, lacks credibility," Crotty said. "Community pharmacies are businesses, just like (Countdown)."

The ICPG submitted affidavits from medical experts that took issue with the decisions to grant ICPSAs to the Countdown pharmacies.

But the DHBs submitted that the court's role was to decide whether decision-makers acted within their legal powers, not to sit in judgment on whether they made the right decision.

"Where...the decisions in issue are only reviewable for fraud, corruption or bad faith, it is difficult to imagine a situation in which expert evidence will be relevant."

Māori health

Lawyer Dale La Hood, for the former Hutt Valley DHB, said Wainuiomata’s Countdown pharmacy had improved Māori health outcomes through its opening hours and discounted prescription charge.

“What we have in Wainuiomata is a Countdown pharmacy opening seven days a week and providing access that didn’t exist previously.”

La Hood took issue with the ICPG’s presumption to speak on behalf of local Māori on their expectations of consultation.

If the DHB had sat and waited for more information, it was potentially non-Treaty compliant by carrying out unnecessary consultations, he said. 

The ICPG had raised concerns over predatory pricing, which could leave Wainuiomata’s two independent pharmacies unable to provide all the less-profitable services such as free delivery. 

However, La Hood said both pharmacies were doing very well, with one of them dispensing several hundred more prescriptions than the Countdown pharmacy per day. 

“The DHB should be free to grant service delivery contracts without challenge from disgruntled commercial competitors, even ones with a health promotion focus,” he said.

One stop shop

Lawyer Seb Bisley for Hauora Tairāwhiti said the region had relatively few pharmacies and a high level of deprivation. 

Countdown had offered longer hours, and it was a one-stop shop for people coming into town with their families.

“It is really hitting the mark about the issues Hauora Tairāwhiti is concerned about.”

Bisley said allegations that Hauora Tairāwhiti had failed to adequately monitor the Countdown pharmacy as it was required to do was not correct and there was evidence of regular contact.

An email from Countdown asking whether someone at the DHB was “the right person to contact” was a consequence of the total reorganisation of the health sector, not evidence of a lack of contact, Bisley said.

In response, ICPG lawyer Robert Kirkness said Hauora Tairāwhiti’s monitoring of the Countdown pharmacy in Gisborne was not proactive enough. The failure to check had resulted in the pharmacy closing indefinitely.

The ICPG’s position on effective control was that Countdown’s pharmacist director should be able to make active decisions without the agreement of the corporate director. The ability to block corporate decisions was insufficient, Kirkness said.

Justice Cheryl Gwyn reserved her decision.