In the “austerity” period immediately following the Second World War, Great Britain struggled to make an economic recovery. There were severe shortages of virtually all commodities, including pharmaceutical products. Even the building materials needed to make Broadwater Road a more suitable pharmaceutical warehouse, were in short supply. Naturally, such problems created a difficult environment for UniChem, but, despite this, good progress continued to be made.
By June 1947, the figure of pharmacies in membership had exceeded 500, and in the autumn of the same year, it was decided to raise capital by another share issue. The issue was made in January 1948, with £50,000 in £1 shares. Sensibly, some of these shares were to be allocated to members who had been disappointed in the previous share issue, thus curing this long held complaint. The issue was taken up within 3 days, showing the good opinion held of the company.
In March, a significant step forward occurred when UniChem was recognised as a bona fide wholesaler, by the Proprietary Articles Trade Association (P.A.T.A.), who were a very prestigious organisation at the time. Unfortunately, despite this announcement, a few of the major pharmaceutical manufacturers still refused to supply their products to UniChem. In fact, Parke Davis Ltd & Eli Lilly Ltd held out for another four years!
In September members were invited to increase their shareholding to £500. Nearly £20,000 was raised in this manner and a form of loan scheme was set up to help younger pharmacists to buy the pharmacies of retiring members. As we shall see, this was to be an indicator of events of later years.
However, all pharmaceutical matters in 1948 were overshadowed by the massive impact caused by the arrival of the National Health Service, or NHS as it became known.
Prior to the formation of the NHS, members of the public had been obliged to pay for their dispensed medicines, although many of them were enrolled in insurance schemes, such as the Hospital Savings Association (HSA), which defrayed such expense.
These medicines, in the main, consisted of mixtures, ointments, and liniments etc, made to either a fixed formula from the British Pharmaceutical Codex (B.P.C.), or one that had been devised by the prescribing doctor himself. Such compounds were usually made extemporaneously in the dispensary of the pharmacy. The prices of these medicines had perforce to be kept to a minimum, so as to render them more affordable to the clientele, which was mainly working-class.
Once the NHS was in being, with its “free medicines for all” policy, all doctors were able to prescribe exactly what was best for the patient, regardless of cost. Co-incidentally, this period saw the introduction of new, more efficacious, and above all, more expensive treatments.
The change to these new treatments had begun with the invention of M & B 693 (sulphapyridine) in 1938, and been vastly accelerated by the development and usage of antibiotics in World War II. An avalanche of these new important discoveries such as Penicillin and Tetracycline, was occurring, and as a direct result the cash value of all products used in retail and, therefore, wholesale pharmacy soared.
Because of the success of these expensive new medications, the actual physical compounding of medicines in the pharmacy’s own dispensary rapidly declined, and also became of far less importance, from a strictly financial point of view, to both the retail pharmacy owner and to wholesalers such as UniChem.
However, this change produced a new problem for the retail pharmacy owner. The treatments had become so expensive that he could not afford to keep large amounts of them in stock. He needed them to be delivered to his pharmacy in a few hours. Thus the pharmaceutical wholesaler, with frequent deliveries, became his stockroom.
The result of these developments was that the relative importance of the many newly introduced branded pharmaceuticals (usually referred to as “ethicals”) became far greater for wholesalers, than the more familiar raw drugs, which nevertheless still had to be carried in the warehouse inventory, taking up space and producing little profit.
Seeing a financial opportunity, UniChem’s Board decided to major on these ethicals, and by the end of 1949, the company’s monthly sales level had reached some £10,000, and profit margins were described as very satisfactory. In fact things had gone so well that, for a short period, membership recruitment had to be shut down because of a serious shortage of space in the Broadwater Road warehouse.
Over the next few years, membership continued to grow strongly, reaching 700 in 1950 and 760 in 1951. This growth was powered forward by Lewis Watson, who had joined the company in 1945 as a sales representative. He was by now the Organising Secretary and was to become Managing Director in 1954, taking over from Ernest Skues, who became Governing Director.
A further £25,000 of shares were issued in May 1951, and during this year the sales turnover of the company exceeded £400,000 for the first time. Once more lack of warehouse space began to cause problems, but these were soon overcome by some extra building work at Broadwater Road.
Unfortunately, despite being in the forefront of the move into “ethicals” distribution, the company was still being sorely handicapped by a stubborn reluctance on the part of a few pharmaceutical manufacturers, to recognize it as an accredited wholesaler. It was only as a result of endless diplomacy and hard work on the part of Ernest Skues, that the battle was finally won. This was signified when both Parke Davis Ltd & Eli Lilly Ltd began to supply UniChem in 1952.
In January of that year, Geoff White joined the company, initially as assistant to Lewis Watson. He was a pharmacist, with experience as a manager in the family-owned Herbert group and therefore he was fully imbued with all of UniChem’s principles.
By this time membership had reached 800 (including 58 in South Wales), annual turnover was £550,000 and £18,000 had been returned to the members as their annual rebate.
The delivery fleet consisted of four vans, based at the Broadwater Road warehouse. However, this “van-delivered” part of the business formed only about 50% of the total turnover. The appeal of the UniChem co-operative concept had spread far and wide, and in particular to South Wales and the West Country. In these areas, deliveries were conducted by the GPO parcel post, which in those days was a service of which the nation could be proud. Orders posted in South Wales before nightfall, would reach Tooting, without fail, by dawn next day. UniChem was then able to guarantee that they were assembled, and in the post, by 5pm the same day. With very few exceptions, the order would then be delivered by the GPO to the pharmacy concerned, early the next morning. Many a Cornish or Welsh pharmacist had more confidence in this “return of post” service than in the van delivery of their local wholesalers. Unfortunately, this form of business was to decline as the national postal service deteriorated.
In 1953 the frequency of van deliveries was increased to twice-weekly. The extra sales which this improvement generated again brought on severe space problems at Broadwater Road. To meet this pressure, an extra warehouse was leased nearby, at Fortescue Road, Colliers Wood, and the chemists sundries range was moved to the new site, which opened for business on January 24th 1954.