JEDDAH, 8 January 2004 — If you look at Makkah, Jeddah and Taif, it is obvious that the number of pharmacies is increasing. According to figures released two years ago, there were about 400 pharmacies in Jeddah. Now there are 845, which is an increase of 115 percent. The same applies in Taif which once had 32 pharmacies but now has 70.

What is surprising is that no one ever complained about a shortage of pharmacies or a shortage of medicine. This indicates that there were sufficient pharmacies and supplies in the market. So why such great increases?

An expert in the field blamed the sharp increase on hidden issues that only people in the business know about. Five companies — two of them big — have recently entered the pharmacy market and it is now survival of the fittest, he said. The big companies do not concentrate on traditional advertising but instead open as many branches as possible. In other words by increasing their presence, they are in effect advertising.

The expert naturally questions the economy of opening two pharmacies 200 meters from one other, in locations that costs from SR200,000 to SR300,000 a year in addition to other costs such as lighting and decoration. This is only harming small investors in the pharmacy industry.

Although Okaz newspaper took these concerns to a big pharmacy chain with a 32 percent share of the markets in Jeddah, Makkah and Taif, no responses were forthcoming with company confidentiality being cited as the reason.

An agent from a rival company, however, confirmed that it cost from SR180,000 to SR500,000 to establish a new pharmacy, depending on equipment and location. He added that there was huge competition in the market at the moment between the big companies.

Wajdi Mahmoud, a small pharmacy investor, said that his situation was serious. “We used to make a good profit before these big companies entered the market. I question who authorizes two big pharmacy chains to open 150 stores each, all at the same time. These companies have declared war on us. They open a big store next to us and then another one on the other side of the street. Small investors are victims. Furthermore, these companies rely 100 percent on foreign workers. I hope the authorities step in to enforce Saudization on them,” he said.